STTG Market Recap May 8, 2015 – Stock Trading To Go
A “Goldilocks” jobs report from the government Friday helped lift markets – by goldilocks analysts have said this was a number that showed growth for the U.S. economy …but not enough to push the Fed to raise rates anytime soon. So the market got the best of both worlds. Futures leaped on the data and indexes stayed firm all day as the S&P 500 gained 1.35% and the NASDAQ 1.17%. In reality the employment data was very much line in expectations but sometimes that’s all you need, especially when the market has grown sour.
April’s 223,000 nonfarm payrolls were strong enough to signal a rebound from the economy’s first quarter decline, but weak enough to hold off Fed rate hikes until the second half of the year. “It’s a nice ‘Goldilocks’ report. We haven’t had one in awhile,” said John Canally, economist and market strategist at LPL Financial. “The people worried about the first quarter being more than transitory were happy. People worried about the Fed hiking in June, those people were happy.” “This is just-right jobs for stocks,” said Darrell Cronk, president of Wells Fargo Investment Institute . “We hit it right where we needed to be, not too much and not too little. ”
The April nonfarm payrolls were nearly identical to the consensus forecast of 224,000, and the decline in the unemployment rate to 5.4 percent was as expected. That showed a solid spring back from March’s 85,000 jobs, after revisions. Wage growth remained limited, with average hourly earnings rising 0.1 percent in April after a revised 0.2 percent March gain that was weaker than initially reported. Compared with a year earlier, hourly pay was up 2.2 percent last month.
The S&P 500 is back to the top of a range it has been in since February. Likewise for the NASDAQ. In the short run news can trump technicals – much like an earning report trumps an individual stocks chart. So we’ll see if this momentum can continue next week and get these indexes out of their malaise.
Still negative on the NYSE McClellan Oscillator – to feel more confident bulls want to see a sustained positive reading.
We are now in the last 25% or so of key earnings reports – next week should see the bulk of what remains.
AOL (AOL) reported adjusted quarterly profit of 34 cents per share, two cents above estimates, while revenue was well above forecasts. AOL’s results were driven by strength in video, mobile, and programmatic advertising.
Visa (V). surged amid a report that it’s in talks to buy its former European subsidiary for as much as $20 billion.
We talk about stock buybacks constantly in this market and here we are again – Biogen (BIIB) added 4 percent, its best gain since March, after saying it will buy back $5 billion in stock.
Monster Beverage (MNST) fell 10 percent, the biggest drop since October 2012, as first-quarter profit and sales trailed analysts’ estimates.
Bojangles (BOJA) surged 40 percent in its trading debut . The restaurant chain priced its initial public offering at $19 per share, above the expected range, giving the company a $680 million value.
If you are interested in foreign markets, there is an excellent story on Brazil written by Bloomberg that you might want to add to your weekend reading list.
There is a growing resignation—and anger—that Brazil, a country that seemed so close to joining the ranks of the world’s developed nations, isn’t going to pull it off. Lula inspired the country with promises of a “new Brazil” that would leave behind five centuries of poverty and corruption. Brazilians now understand that behind Lula’s message was a rigged, corrupt game that enriched a few and hobbled the country’s ability to compete.
Have a good weekend and we’ll see you back here Monday.
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STTG Market Recap May 8, 2015 – Stock Trading To Go
