3 May 2013 AMC

3 May 2013 AMC

Market Summary

Market Internals

Leaders and Laggards

Technical Updates

Commentaries 

Stock Market Update

16:05 ET Dow +142.38 at 14973.96, Nasdaq +38.01 at 3378.63, S&P +16.83 at 1614.42 : [BRIEFING.COM] The major averages registered strong gains as the April jobs report boosted stocks at the open. The S&P 500 jumped 1.0% and notched a fresh record close at 1,614.40 while the Dow added 0.9% after peeking above 15,000 in morning action.  On the surface, the employment report for April looked good. Payroll growth surprised to the upside, increasing by 165,000. That was 10,000 more than the 155,000 expected by the Briefing.com consensus. Revisions in March, to 138,000 from 88,000, and February, to 332,000 from 268,000, were strongly positive.  Yet, the underlying details point toward weaker consumption levels as the average workweek dropped to 34.4 hours in April from 34.6 and average hourly earnings increased 0.2%.  The decline in workweek more than offset the increase in payrolls and earnings. Altogether, aggregate wages declined 0.3% in April. That would be the first decline in wages since January.  Cyclical sectors led stocks higher and two recent underperformers, industrials and materials, finished atop the leaderboard.  The industrial space displayed all-around strength, but transportation-related stocks outperformed notably. The Dow Jones Transportation Average ended higher by 2.1% as 18 of 20 components registered gains. Although the index traded ahead of the broader market, it remains 1.0% away from its all-time best.  Elsewhere, the materials sector benefitted from a notable rise in basic metals. Copper made its biggest advance in more than a year by surging 6.5% to $3.306. Steelmakers also contributed to the outperformance of the growth-sensitive sector as the Market Vectors Steel ETF (SLX 42.59, +1.19) gained 2.9%. Meanwhile, the SPDR Materials Select Sector ETF (XLB 39.82, +0.69) ended higher by 1.8%.  The energy space also outperformed as crude oil extended its recent strength and rose 1.6% to $95.47. Since April 17, the energy component has added almost $10.  While most cyclical groups registered gains in excess of 1.0%, the financial sector underperformed. JPMorgan Chase (JPM 47.57, -0.51) slipped 1.1% after the New York Times gained access to confidential government documents alleging the bank engaged in ‘manipulative schemes' in the energy market and that its executives gave ‘misleading statements' while testifying under oath.  In notable sector earnings, American International Group (AIG 44.52, +2.39) added 5.7% after reporting a bottom-line beat.  Although the April jobs report received most of today's attention, some noteworthy quarterly reports crossed the wires as well. LinkedIn (LNKD 175.59, -26.08) slumped 12.9% after its better-than-expected earnings report included cautious full-year revenue guidance.  On the downside, the defensively-geared telecom and utilities sectors ended with respective losses of 0.2% and 0.4%.  Reviewing today's remaining data, the ISM Non-manufacturing Index declined from 54.4 in March to 53.1 in April. The Briefing.com consensus expected the index to fall to 54.0.  Total factory orders fell 4.0% in March after increasing a downwardly revised 1.9% (from 3.0%) in February. The Briefing.com consensus expected factory orders to fall 2.5%.  Durable goods orders fell 5.8% (from a previously released -5.7%) after increasing 4.3% in March.  There is no notable economic news set to be released on Monday. On Tuesday, March consumer credit will be announced at 15:00 ET.

Commodities

Treasuries

Weekly Analysis
Week 38





Technical Updates






 







Briefing's Commentaries

Week in Review: Technology Leads Stocks Higher Monday proved to be a one-sided affair as equities climbed throughout the session. As a result, the S&P 500 settled higher by 0.7% while the Nasdaq rose 0.9%. The Nasdaq displayed relative strength from the onset as technology stocks paced today's advance. Major sector components Apple (AAPL 449.98, +4.46), Google (GOOG 845.72, +16.11), and Microsoft (MSFT 33.49, +0.33) all settled with gains of at least 2.5%. 

On Tuesday, stocks ended the session on a modestly higher note as the Nasdaq rose 0.7% while the S&P 500 added 0.3%. The Dow Jones Industrial Average, for its part, tacked on 0.1%. The major averages spent the day climbing off their lows after it was revealed that manufacturing activity in the Chicago region in April contracted for the first time since September 2009, falling from 52.4 in March to 49.0. The Briefing.com consensus expected the Chicago PMI to decline to 52.0. Technology stocks paced the late-morning rebound as the sector displayed strength amid reports indicating Apple's $17 billion debt offering received significant investor interest. 

Stocks ended Wednesday's session on their lows as global growth concerns reemerged. The three major indices all lost 0.9%, but the underperformance of small cap stocks was notable as the Russell 2000 slid 2.5%. China reminded investors of its importance to the global economy as the decline in the country's Manufacturing PMI (50.6 actual, 50.9 prior, 51.0 consensus) along with a disappointing U.S. ISM Index (50.7 actual, 51.3 prior, 51.0 consensus) pressured commodities and commodity-related sectors. The materials space declined throughout the day as related metals sold off. 

Thursday saw the S&P 500 erase all of Wednesday's losses. The benchmark average rose 0.9% while the Nasdaq outperformed with a gain of 1.3%. In addition to earnings reaction, investors welcomed further easing from the European Central Bank as the ECB cut its key interest rate by 25 basis points to a record low of 0.50%. Visa (V 179.54, +4.14) jumped 5.7% after beating on earnings and revenue. ..NYSE Adv/Dec 2199/809. ..NASDAQ Adv/Dec 1830/649.

Next Week In View

Jason's Commentaries

What a surprise on Friday, Nonfarm Payrolls results added 165k jobs for the month of April and managed to have a massive upwards revision on March's job report. Traders were all in position for some correction however they were wrong as well. ADP report showed a lackluster job reports on Wednesday, however Thursday's unemployment claims were at its 5 years low. This sure caught traders off guard. Market was up 142 points, breaking new high for all 3 indices. Seems that Sell in May isn't coming anytime soon. The initial reaction in the market was massive short coverage at the start of the day which subsequent led to a rally. However, it was over-done by the market. 165k jobs added wasn't impressive if you think about it. There is likely to have some minor correction this week due the over-reaction in the market. The internals were very bullish and even the treasuries sold off. On the weekly perspective, the market had been rocky due to the FOMC minutes and the job reports. Market broke into new high and i'm expecting the market to continue its bullishness for a while. There are no major news this week so i believe it is likely to be flat for this week. Afterall, we're in May.

On the sidenote, my heart goes out to the Malaysians for having such a corrupted election.

Market Call: FLAT to downside

Date: 6 May