Headline News: The U.S. economy continued to crank out jobs in May, with nonfarm payrolls surging more than expected despite multiple headwinds, the Labor Department reported Friday. Payrolls in the public and private sector increased by 339,000 for the month, better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth. The unemployment rate rose to 3.7% in May against the estimate of 3.5%, even though the labor force participation rate was unchanged. The jobless rate was the highest since October 2022, though still near the lowest since 1969. Average hourly earnings, a key inflation indicator, rose 0.3% for the month, which was in line with expectations. On an annual basis, wages increased by 4.3%, which was 0.1 percentage point below the estimate. The average workweek fell by 0.1 hours to 34.3 hours. (Jeff Cox CNBC) Markets: The S&P 500 closed at another new high for the year at 4221.02 after briefly touching support at 4169.68. However, the RSI index and the Advanced/Decline line did not achieve new yearly highs. So, the buying was not widespread, and that needs to change before a sustained uptrend can begin. The new potential resistance level is not at… Read More
Headline News: The S&P 500 futures are up 8 points and are trading 0.1% above fair value. The NASDAQ 100 futures are up 11 points and are trading 0.1% above fair value. The Dow Jones Industrial Average futures are down 5 points and are trading slightly below fair value. Stock futures are mixed this morning. The Dow Jones Industrial Average futures are underperforming due to weakness in Salesforce (CRM) following its earnings report. The House passed a 2-year debt ceiling/spending cap bill by a vote of 314-117. The Senate is expected to vote this weekend. Also, market participants are reacting to Fed officials signaling that a pause is likely in June, but officials also contend that more increases may be needed. There is a large slate of U.S. economic data due out today, yet foreign data featured a stronger-than-expected Caixin Manufacturing PMI report from China and better-than-expected inflation data from the eurozone. May CPI was up 6.1% year-over-year versus an expected 6.3% and the prior month’s reading of 7.0%. The 2-yr Treasury note yield is up three basis points to 4.42%, and the 10-yr note yield is up two basis points to 3.65%. (Michael Gibbs, Director of Equity Portfolio & Technical… Read More
Headline News: The S&P 500 futures are down 17 points and are trading 0.4% below fair value. The NASDAQ 100 futures are down 55 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are down 92 points and are trading 0.2% below fair value. Stock futures are a little softer this morning as market participants continue to wait on the passage of the debt ceiling and digest increasing calls that suggest mega-cap stocks and growth stocks are due for a period of consolidation. Concerns about global growth prospects have been a limiting factor, too, after China’s Manufacturing PMI remained in contraction for the second consecutive month. Also, worries are mounting about the Fed sticking to a hawkish line after Cleveland Fed President Loretta Mester (not a voting FOMC member), in interview said there is no “compelling reason to pause,” according to the FT. The 2-yr Treasury note yield is down seven basis points to 4.42%, and the 10-yr note yield is down six basis points to 3.65%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 traded above the resistance level at 4212.97 and outside the upper band briefly on Tuesday. However,… Read More
Headline News: The S&P 500 futures are up 24 points and are trading 0.6% above fair value. The NASDAQ 100 futures are up 195 points and are trading 1.4% above fair value. The Dow Jones Industrial Average futures are down 14 points and are trading slightly below fair value. Stock futures have been mixed this morning following the news over the weekend that President Biden and House Speaker McCarthy reached a debt ceiling deal; however, market participants are now waiting to see if the debt ceiling agreement will pass in both chambers of Congress. Strength in the mega-cap stocks, which are getting an added boost from falling market rates, has been supportive of the S&P 500 and NASDAQ 100 futures. The S&P 500 closing above 4,200 last Friday has been another supportive factor. The 2-yr Treasury note yield is down five basis points to 4.51%, and the 10-yr note yield is down nine basis points to 3.72%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 rallied past resistance at 4169.68 and came close to the high for the year at 4212.97 before closing at 4205.45. The trading came with an above-average volume of 4,565,496,576, but… Read More
Headline News: The S&P 500 futures are up 10 points and are trading 0.2% above fair value. The NASDAQ 100 futures are up 57 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 68 points and are trading 0.2% above fair value. The stock market is poised for a modestly higher open ahead of the extended holiday weekend. Markets are closed on Monday for Memorial Day. Reports indicate that negotiators are close to a deal to raise the debt ceiling for two years while cutting government spending; however, separate reports suggest support from party members on both sides of the aisle is not guaranteed. Market participants are also awaiting key economic data this morning. Namely, the PCE Price Index and core-PCE Price Index, the Fed’s preferred inflation gauge, will be released as part of the Personal Income and Spending Report for April at 8:30 a.m. ET. Treasuries are little changed from yesterday’s settlement levels. The 2-yr note yield is up one basis point to 4.51%, and the 10-yr note yield is down two basis points to 3.79%. The U.S. Dollar Index is down 0.3% to 103.91. WTI crude oil futures up 1.0% to… Read More
Headline News: The S&P 500 futures are up 29 points and are trading 0.7% above fair value. The NASDAQ 100 futures are up 287 points and are trading 2.1% above fair value. The Dow Jones Industrial Average futures are down 66 points and are trading 0.2% below fair value. A huge gain in a semiconductor name after the company beat earnings estimates and raised guidance, along with other semiconductor stocks trading higher in solidarity, has driven the outperformance of the NASDAQ 100 and S&P 500 futures. Meanwhile, debt ceiling uncertainty has kept the broader market in check. The angst around the debt ceiling has escalated after Fitch Ratings put the nation’s AAA rating on “watch negative.” Also, Congressional members will leave Washington for Memorial Day but will return to vote on legislation if a debt ceiling deal is reached, according to The Hill. Fitch’s action has fueled selling in the Treasury market. The 2-yr note yield is up seven basis points to 4.41%, and the 10-yr note yield is up four basis points to 3.75%. Elsewhere, Germany’s Q1 GDP was revised to show a contraction of 0.3% after a 0.4% contraction in Q4, meeting the technical definition of recession with… Read More
Headline News: The S&P 500 futures are down 16 points and are trading 0.4% below fair value. The NASDAQ 100 futures are down 61 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are down 134 points and are trading 0.3% below fair value. Weakness in stock futures is a reflection of more skittishness about the debt ceiling. Reports indicate that discussions have reached an impasse and that no additional meetings are scheduled at this time. Treasuries reflect some flight to safety action. The 2-yr note yield is down six basis points to 4.28%, and the 10-yr note yield is down three basis points to 3.67%. The Reserve Bank of New Zealand raised its official cash rate by 25 bps to 5.50% and indicated that the terminal rate had been reached. The weekly MBA Mortgage Application Index dropped 4.6%, with purchase applications falling 4.0% and refinance applications dropping 5.0%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 sold off below two support levels and closed at 4145.58. The volume was higher, with 2,413,644,800 shares traded, but the down volume was only 55% of the total. The RSI index also dove… Read More
Headline News: The S&P 500 futures are down 12 points and are trading 0.3% below fair value. The NASDAQ 100 futures are down 50 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are down 91 points and are trading 0.2% below fair value. Yesterday’s meeting between President Biden and House Speaker McCarthy did not result in a debt ceiling deal, but both sides will continue to negotiate. Overall, market participants continue to trade with some hesitancy as the S&P 500 continues to run into resistance at the 4,200 level. Flash Manufacturing PMI readings from Germany and the U.K. missed expectations, pointing to a deepening contraction in activity while France’s reading was ahead of estimates, but it also reflected contraction. Treasury yields are inching higher. The 2-yr note yield is up four basis points to 4.38% and the 10-yr note yield is up two basis points to 3.74%. The U.S. Dollar Index is up 0.3% to 103.54. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 was little changed and closed lower at 4192.63 with lower volume of 2,192,487,680. The index traded below support at 4186.92, but buyers stepped in at… Read More
Headline News: The S&P 500 futures are up 2 points and are trading slightly above fair value. The NASDAQ 100 futures are flat and are trading in line with fair value. The Dow Jones Industrial Average futures are up 24 points and are trading 0.1% above fair value. Stock futures have seen mixed action this morning, yet moves are relatively modest. Uncertainty about the debt ceiling continues to loom over the market. Treasury Secretary Janet Yellen reiterated in an interview that early June is a “hard deadline” for the debt ceiling, and the odds that the US can pay all its bills on June 15 are “quite low” without a debt ceiling increase, according to NBC News. House Speaker Kevin McCarthy, though, said he had a “productive” call with President Biden and will resume debt ceiling negotiations today, according to the NY Times. Minneapolis Fed President Neel Kashkari (FOMC voter) said in a CNBC interview that it’s a close call between raising rates in June or skipping a meeting, adding that if the Fed skips in June, it does not mean the tightening cycle is over. Separately, the G7 released a joint statement calling on China to “play by international… Read More
Headline News: The S&P 500 futures are up 11 points and are trading 0.3% above fair value. The NASDAQ 100 futures are up 9 points and are trading 0.1% above fair value. The Dow Jones Industrial Average futures are up 92 points and are trading 0.3% above fair value. Stock futures sport gains, albeit somewhat modest, fueled by carryover momentum from yesterday’s rally and ongoing optimism about debt ceiling discussions. Positive price action in several mega cap stocks on this options expiration day has been a supportive factor this morning. There’s some emerging hope, too, that the S&P 500 will break out above the 4,200 level. Market participants will be watching that key level, as well as the 11:00 a.m. ET panel discussion with Fed Chair Powell and former Fed Chair Bernanke regarding perspectives on monetary policy. Japan’s Nikkei reached its highest level since 1990 despite the country reporting hotter-than-expected Consumer Price Index data for April. The 2-yr Treasury note yield is unchanged at 4.27%, and the 10-yr note yield is up one basis point to 3.66%. The U.S. Dollar Index is down 0.3% to 103.25. Energy complex futures trade in mixed fashion. WTI crude oil futures are up 1.3%… Read More
