May 3, 2024

A slowing jobs market triggered a spurt in equities today pushing the major averages into the plus column for the week. April non-farm payrolls came in at 175k vs. 240k estimated and down from 303k the prior month, while the Unemployment Rate increased to +3.9%, a record 27th month under 4%. Wage growth rose +0.2%, below +0.3% consensus. Yields dropped on the data with the rate on the 10-year Treasury falling to 4.502% and the two-year T-Bill landing at 4.812%. Stocks shot higher at the bell with Apple Co (AAPL) and Amgen (AMGN) leading the run after delivering solid Q1 earnings results. Cloudflare (NET) and Coinbase (COIN) traded down after disappointing. The rally was broad-based with every sector higher led by strength in Technology (XLK), up +2.79%, Communication Services (XLC) and Materials (XLB). The different indexes closed near the highs of the day with the DJIA adding 450.02 points (+1.18%) finishing at 38675.68. The S&P 500 jumped 63.59 points (+1.26%) to 5127.79, while the NASDAQ soared 315.37 points (+1.99%) and settled at 16156.33.

Breadth was positive with advancing issues beating declining issues 3:1 on the NYSE and 2:1 on the NASDAQ. Advancing volume was 67% on the NYSE and 73% of the NASDAQ. The VIX dropped 1.19 (-8.11%) and closed at 13.49. Crude oil prices lost 0.92 (-1.15%) and the June contract closed at $78.04 a barrel. Gold prices eased 0.40 (-0.02%) and finished at $2309.20 an ounce. Bitcoin (BTC) closed the session at $62,100.

Investors celebrated a round of softer than expected economic data which could make it easier for the Federal Reserve to cut rates sooner than later. The CME Group FedWatch saw the probability of a September rate cut jump to 66% from less than 50% a few days ago. Next week is a slow week for economic data so we could see equities try to build on this week's gains. Traders need to keep an eye on the 50-day MA on several of the different indexes. Despite moving higher for a second straight week, that resistance level looms over another leg higher.

Earnings releases to watch for on Monday include: Spirit Airlines (SAVE), Coty Inc (COTY), Cabot Corp (CBT), Tyson foods (TSN), Fabrinet (FN), Simon Property Group (SPG) and Palantir Technologies (PLTR).

Monday's Market Moving Economic Calendar: T-Bill Auction.

By David L. Blake, CMT