Monday 05/02/2022 – DIA 330.74 +.32%, QQQ 318.48 +1.67%, SPY 414.48 +.60%, IWM 186.89 +1.05% CNN Rear & Greed @ 30 (Fear)
April ISM Manufacturing Purchasing Managers Index (PMI) was reported at 55.4 vs. the 57.6 expected. The ISM Manufacturing Prices Paid for April came in less than expected at 84.6 vs. 87.5. The ISM Manufacturing Employment Index for April was much less than expected at 50.9 vs. 54.7. Equity markets tried to stabilize early in the session from the previous Friday’s rout. Stocks came under selling pressure around 11 am when margin clerks get active. Stocks sold off hard and bottomed around 2:30 pm before reversing impressively to close positive on the day. Communication Services (XLC) 60.69 +2.76% led the eleven S&P 500 economic sectors, followed by Energy Services (XLE) 76.35 +1.60% and Technology Services (XLK) 143.57 +1.52%. Intel (INTC) 44.96 +3.14% and Microsoft (MSFT) 284.47 +2.50% led the DJIA. While Align Technologies (ALGN) 308.88 +6.54% led the NDX100 as it bounced from the previous week’s earnings call drubbing. DocuSign (DOCU) 85.83 +5.96%, the internet contract service provider, followed in second place. EPAM Systems (EPAM) 288.50 +8.87% led the S&P 500, as the engineering design technology services firm was upgraded ahead of earnings by piper Sandler from Neutral to Overweight. Novavax (NVAX) 53.75 +19.26% soared on news the FDA had a plan to convene an advisory panel for the firm’s COVID-19 vaccine. On the downside, Global Payment Systems (GPN) 124.36 -9.21% beat on earnings but missed on the revenue line.

Tuesday 05/03/2022 – DIA 331.25 +.15%, QQQ 318.82 +.34 +.11, SPY 416.38 +.46%, IWM 188.49 +.86% CNN Fear & Greed Index @32 (Fear)
Factory Orders were reported higher than expected, +2.2% vs. 1.1%.  From the opening, stocks drifted higher in somewhat volatile trading. Small caps outperformed. Energy Services (XLE) 78.49 +2.80% led the 11 S&P 500 economic sectors, followed by Financial Services (XLF) 34.97 +1.30%. Boeing (BA) 153.58 +3.34% and JPMorgan (JPM) 123.03 +2.14% led the DJIA. Verisign (VRSN) 183.14 +4.65% led the NDX100 as it bounced from the previous week’s earnings-related selloff. Western Digital (WDC) 61.72 +14.47% led the S&P500 as Elliot Management pushed the firm to split its businesses. Leading the Russell 1000, Credit Acceptance (CACC) 621.88 +20.16% beat on earnings and revenues handily. Also beating on earnings and revenue, specialty chemicals firm The Chemours Company (CC) 38.91 +17.55% bolted higher. On the downside, former pandemic favorite educational services provider Chegg, Inc. (CHGG) 38.91 – 30.26% plummeted after it reported earnings and cut its forecast. Also, to the downside on an earnings and revenue miss, Rockwell Automation (ROK) 213.74 -14.52 dropped due to a shortage of semiconductors, continued supply chain issues, and inflation being cited.

Wednesday 05/04/2022 – DIA 340.59 +2.82%, QQQ 329.6 +3.38%, SPY 429.06 +3.05%, IWM 193.52 +2.67% CNN Fear & Greed Index @38 (Fear)
FOMC Day. ADP Employment Change came in much lower than expected at 247K vs. 395K. The S&P Global Services PMI reported higher than expected at 55.6 vs. 54.7. ISM Services New Orders disappointed, at 54.6 vs. 64.3, while ISM Services PMI came in at 57.1 vs. 58.5. Equity markets traded quietly without the usual FOMC drift higher into the 2 pm rate decision time and subsequent Fed Chairman Jerome Powell’s post-decision press conference. Interest rates which had moved higher going into the rate decision and press conference, eased enough to spark a rally, as traders took the Chair’s comments to be less hawkish than anticipated. By the end of the session, markets exhibited a swift, extensive rally with a classic short-covering of beaten-down names. Energy Services (XLE) 81.75 led the 11 S&P 500 economic sectors as WTI Crude rallied, closing at 107.83 +$5.42 (in front of the OPEC meeting).  Technology Services (XLK) 148.87 +3.51% took second place. Honeywell (HON) 205.85 +4.47% led the DJIA, followed by Caterpillar (CAT) 222.59 +4.20% and 3M (MMM) 154.24 +4.15%. Starbucks (SBUX) 81.64 +9.83% led the NDX100, followed by Advanced Micro Devices (AMD) 99.42 +9.10%.  Beating on earnings and revenue, enterprise software and technology firm Paycom (PAYC) 328.20 +13.78% led the S&P 500.  This was followed by Generac Holdings (GNRC) 261.78 +11.79%; the emergency backup power source provider also beat earnings and revenue expectations. On the downside, Lyft, Inc. (LYFT) 21.56 -29.91% dropped hard. The ride-sharing firm reported better revenue and less of a loss than anticipated but indicated that continued costs related to driver acquisition would continue.

Thursday 05/05/2022 – DIA 330.24 -3.04%, QQQ 313.00 -5.04%, SPY 413.81 -3.55%, IWM 185.67 -4.06% CNN Fear & Greed Index @32 (Fear)
Nonfarm Productivity was reported at a steep multi-decade decline -7.5% vs. the -5.45% expected. Interest rates broke to new highs, with the 10-Year Note (yield) Index ranging from 29.27 to 31.08, closing at 30.66. Preliminary Unit Labor Costs came much higher at 11.6% vs. 9.9%. Initial Jobless claims for April were reported at 200K vs. 182K. Equity markets reversed the FOMC rally from the previous day. Earnings disappointments from the previous night and before the opening and the economic data put selling pressure on stocks. By the end of the session, all 30 DJIA stocks were red, and in the broader market declining, stocks beat advancing stocks by 9 to 1. Consumer Discretionary (XLY) 160.18 -5.60 % was the hardest hit S&P 500 economic sector, followed by Technology Services (XLK) 141.71 -4.81%. Salesforce.com (CRM) 172.30 -7.11% led the DJIA lower, followed by Nike (NKE) 118.63 -5.89%. Leading the NDX100 to the downside, Cognizant Technology Solutions (CTSH) 73.60 -12.75% came under selling pressure after the application, AI, and digital services provider firm reported less than stellar earnings and revenue. The shares of internet retailer Wayfair (W) 67.45 -25.68% were pounded as the firm missed on earnings and revenues and announced a management shakeup. Former pandemic favorite, internet crafts e-commerce retailer Etsy, Inc. (ETSY) 90.93 -16.83% fell on soft guidance after beating earnings and revenue. In better earnings news, communications equipment provider CommScope Holding Company (COMM) 7.31 +11.77% led the Russell 1000 after beating on the top and bottom lines.

Friday 05/06/2022 – DIA 329.07 -0.35%, QQQ 309.25 -1.20%, SPY 411.34 -0.60%, IWM 182.58 -1.66% CNN Fear & Greed Index @ 31 (Fear)
Nonfarm Payrolls were reported at 428K vs. the expected 391K, but the Labor Participation Rate dropped unexpectedly to 62.2% from the previous 62.4% average. Hourly Earnings came at +.3% vs. the .4% expected. Equity markets succumbed to rising interest rates early on but rallied throughout the session to close well off the lows; the 10-Year Note (yield) Index closed at 31.3 +.57. Energy Services (XLE) 82.92 +2.98% was the day’s outstanding S&P 500 performing sector, as WTI crude oil continued to climb, ending the day at 110.56 +$2.30. Chevron (CVX) 170.69 +2.66% led the DJIA, while Nike (NKE) 114.49 -3.49% was the laggard in the index. There were several earnings disappointments Ilumina (ILMN) 249.05 -14.63%, the medical diagnostics services firm beat on the top and bottom line, but gross margins let down expectations. Also disappointing, athletic apparel and lifestyle brand Under Armour (UA) 9.85 -25.88% was cut down heavily on its weak earnings release and poor forward guidance. In better earnings news, life insurer Unum Group (UNM) 36.31 +13.79% beat on the bottom line due to higher premium income.

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