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Market Snapshot

https://www.briefing.com/stock-market-update

Dow 33874.85 -185.51 (-0.54%)
Nasdaq 13962.71 -119.86 (-0.85%)
SP 500 4181.17 -30.30 (-0.72%)
10-yr Note +1/32 1.629

NYSE Adv 1078 Dec 2195 Vol 1.2 bln
Nasdaq Adv 1380 Dec 2761 Vol 4.7 bln


Industry Watch
Strong: Consumer Discretionary, Utilities, Real Estate, Consumer Staples

Weak: Information Technology, Energy, Materials, Financials


Moving the Market
-- Stock market closes lower, unable to key off great earnings/economic news

-- Disappointing price action fed into the "peak growth" narrative

-- Amazon (AMZN) reported strong earnings results and provided upbeat Q2 revenue guidance





Negative session despite good earnings and economic data
30-Apr-21 16:15 ET

Dow -185.51 at 33874.85, Nasdaq -119.86 at 13962.71, S&P -30.30 at 4181.17
[BRIEFING.COM] The S&P 500 declined 0.7% on Friday, finishing the week little changed, as the market was unable to key off another round of great economic and earnings news. The Nasdaq Composite lost 0.9%, and the Dow Jones Industrial Average lost 0.5%. The Russell 2000 lagged with a 1.3% decline.

Briefly, Amazon (AMZN 3467.42, -3.89, -0.1%) posted strong Q1 results and issued upbeat Q2 revenue guidance, and personal income surged 21.1% m/m in March (Briefing.com consensus 20.5%) due to the government stimulus checks. The PCE Price Index, which is the Fed's preferred inflation gauge, was up 2.3% yr/yr in March while the core reading was only up 1.8% yr/yr.

The market wasn't impressed, but if it was, it didn't show it: AMZN shares closed lower, and seven of the 11 S&P 500 sectors closed lower. The information technology (-1.4%) and energy (-2.7%) sectors struggled at the bottom of the sector standings, with the latter pressured by weakness in Chevron (CVX 103.03, -3.87, -3.6%) despite beating EPS estimates.

Twitter (TWTR 55.22, -9.87, -15.2%) was another disappointment, as shares dropped 15% following its underwhelming earnings report.

Conversely, the consumer discretionary sector (+0.3%), where Amazon and Tesla (TSLA 709.44, +32.44, +4.8%) reside, joined the defensive-oriented utilities (+0.8%), real estate (+0.6%), and consumer staples (+0.04%) sectors in positive territory.

The relatively disappointing price action fed into the "peak growth" narrative, which says the market will find it harder to keep rallying when growth rates for the economy and earnings might not be as fast as they did coming out of the pandemic. Many expect economic growth rates to moderate in the second half of this year.

From a broader viewpoint, today was part of a two-week consolidation trend following a five-week stretch in which the S&P 500 gained roughly 8% leading into earnings season. Thus, with the peak growth narrative and sideways activity in mind, investors presumably felt uneasy about buying in front of a potential pullback.

U.S. Treasuries finished little changed, albeit with some defensive undertones in the longer-end of the curve. The 2-yr yield was unchanged at 0.16%, and the 10-yr yield decreased one basis point to 1.63%. The U.S. Dollar Index advanced 0.7% to 91.27. WTI crude futures fell 2.4%, or $1.52, to $63.51/bbl.

Reviewing Friday's economic data:

Personal income surged 21.1% month-over-month in March (Briefing.com consensus 20.5%) and personal spending rose 4.2% (Briefing.com consensus 4.0%). The PCE Price Index jumped 0.5%, as expected, leaving it up 2.3% year-over-year, while the core PCE Price Index, which excludes food and energy, increased 0.4% (Briefing.com consensus 0.3%), leaving it up 1.8% year-over-year.
The key takeaway from the report is the influence of the personal current transfer receipts. They were massive, but they will be lessening big time in coming months, which allows for some consternation pertaining to the peak growth narrative.
The final April reading for the University of Michigan Index of Consumer Sentiment increased to 88.3 (Briefing.com consensus 87.0) from the preliminary reading of 84.9. The final reading for March was 84.9.
The key takeaway from the report is the finding that an all-time record number of consumers expect the unemployment rate to decline in the year ahead, which is an important view as it relates to spending potential.
The Q1 Employment Cost Index increased 0.9% (Briefing.com consensus 0.7%), seasonally adjusted, for the three-month period ending in March 2021 after increasing 0.7% for the three-month period ending December 2020. Wages and salaries, which account for about 70% of compensation costs, rose 1.0%, while benefit costs, which make up the remainder of compensation costs, increased 0.6%.
The key takeaway from the report is that wages and salaries for civilian workers, private industry workers, and state and local government workers were down from the same period a year ago, which is a basis for why the Fed intends to remain patient with its policy stance.
The Chicago PMI increased to 72.1 in April (Briefing.com consensus 62.0) from 66.3 in March.

Looking ahead, investors will receive the ISM Manufacturing Index for April, Construction Spending for March, and the final IHS Markit Manufacturing PMI for April on Monday.

Russell 2000 +14.8% YTD
S&P 500 +11.3% YTD
Dow Jones Industrial Average +10.7% YTD
Nasdaq Composite +8.3% YTD



Crude futures retrace 2%
30-Apr-21 15:30 ET

Dow -166.52 at 33893.84, Nasdaq +108.10 at 14190.67, S&P -26.35 at 4185.12
[BRIEFING.COM] The S&P 500 is down 0.6% in a session controlled by sellers. Any recovery attempt today has been feeble.

One last look at the S&P 500 sectors shows information technology (-1.3%) and energy (-2.5%) leading the retreat, while the real estate (+0.6%), utilities (+0.4%), and consumer discretionary (+0.3%) sectors trade modestly higher.

WTI crude futures settled lower by 2.4%, or $1.52, to $63.51/bbl.