Last week was a good week for the stock market. In fact, it was the best week for the S&P 500 and Nasdaq Composite since November. It was a good week for a variety of reasons, but arguably the biggest reason was the earnings news.
When the week began, the blended Q1 earnings growth rate for the S&P 500 was just 0.5%. Today, the blended earnings growth rate is 3.3%, according to FactSet, with Microsoft (MSFT) and Alphabet (GOOG) carrying the positive surprise banner.
It was a welcome turn of events going into another busy week of earnings reporting this week. More than 170 S&P 500 companies will post their March quarter results. Amazon.com (AMZN), which reports after Tuesday’s close, and Apple (AAPL), which reports after Thursday’s close, will headline that long list of reporters.
Bernstein upgraded Apple to Outperform from Market Perform ahead of its earnings report. Shares of AAPL are up 2.5% in response to that upgrade, which has helped give the equity futures market a boost along with a 13.4% gain in Tesla (TSLA) after it won approval in China for its self-driving service.
Including that pre-market gain, TSLA is up 38% from its intraday low last Monday. There is some clear rebound fever in TSLA, but the rebound action for the broader market has been heating up too.
Currently, the S&P 500 futures are up 15 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 79 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 63 points and are trading 0.2% above fair value.
Those indications imply more modest gains at the open, but keep in mind that the S&P 500 was up 2.7% last week while the Nasdaq Composite was up 4.2%.
That is some extra padding for a market trying to find its way back to prior all-time highs. Before getting there, however, both the S&P 500 and Nasdaq Composite have to clear their 50-day moving averages of 5,125 and 16,052, respectively. They are close now, but both are still looking up at technical resistance.
The Japanese yen for its part is desperately looking for support and it may have found some. Over the weekend, the yen weakened to 160.00 against the dollar, reaching its weakest level since 1990, but now sits at 156.49 in a move that traders (but not the government) have attributed to government intervention.
It has made for some interesting trading theater in the currency market, which is only one act of what will be an entertaining week for the capital markets that will include the Treasury Department’s quarterly borrowing estimate today at 3:00 p.m. ET, followed by its refunding specifications on Wednesday, a ton of earnings results, the FOMC decision and press conference (Wednesday), and a slate of economic data that will include the Q1 Employment Cost Index (Tuesday), April Consumer Confidence (Tuesday), April ISM Manufacturing (Wednesday), Q1 Productivity (Thursday), April Employment Situation (Friday), and April ISM Non-Manufacturing (Friday).
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Originally Posted April 29, 2024 – Ready to be entertained
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