In Asia overnight, all 11 stock markets that we follow were modestly to moderately higher. In Europe, 10 of the 13 stock markets we follow were the same - also modestly to moderately higher, including all the major European indices.
However, the S&P 500 futures were weak overnight, trading as much as 10 handles below yesterday’s settlement for much of the session.
Yesterday, the FAANG stocks we mention often (FB, AAPL, AMZN, NFLX, GOOG) all charged higher on the heels of FB earnings. Then, after the close, AMZN reported earnings that were through the roof.
The FAANG stocks, which had been leading the equity weakness over the last several weeks, are the subject of a lot of good news right now. World news has been positive as well, with breakthroughs in dealings with North Korea and potentially Iran.
Our call to trade Nasdaq as the leading market yesterday, and to use a Facebook chart as a guide to where the overall indices were going, was right on. Today, in a similar way, we will look to an AMZN intraday chart to forecast where the broader U.S. markets will go. This morning, while the S&P 500 futures are lower, the Nasdaq is holding higher.
Last week, the pattern in the S&P 500 and its companion indices was to rally early in the week then sell off back through the open by the end of the week. This week, equities sold off early on and are now threatening to trade back through the open to the upside.
We have been saying this is a two-sided market, and it sure does continue to be that way. Today’s big question will be whether tech earnings will continue to fuel the rally, or if profit-takers will close out stock positions since today is T+2, the last day to sell stock and have the money available to go back to work on May 1st.
Today’s economic calendar features two items that could be market movers. First, the GDP at 8:30 a.m. EST often carries a more volatile tone, and second, the Consumer Sentiment at 10 a.m. will at times affect financial markets, especially the U.S. dollar. However, we do not expect any major moves based on the calendar today, unless GDP comes in much higher or lower than expectations.
- GDP 8:30 AM ET
- Employment Cost Index 8:30 AM ET
- Consumer Sentiment 10:00 AM ET
- Baker-Hughes Rig Count 1:00 PM ET
- Farm Prices 3:00 PM ET