May 6, 2024

The major averages looked to extend last week's gains following Friday's softer-than-expected payrolls data that helped spur bets toward an earlier rate cut from the Federal Reserve. With a light economic calendar, investors shifted their focus on Fed comments from Federal Reserve Bank of New York President John Williams, who expressed that monetary policy was in a good place but "eventually we will have rate cuts." That positive sentiment extended the win streak to three for the DJIA and S&P 500 while the NASDAQ posted its fourth positive session. More importantly, both the Dow and S&P 500 broke through resistance levels at their respective 50-day MA. Defensive sectors took a backseat during today's session with Communications Services (XLC), Financials (XLF) and Technology (XLK) leading the pack while Real Estate (XLRE), Consumer Staples (XLP), Health Care (XLV) and Utilities (XLU) brought up the rear. The DJIA was higher by 176.59 points (+0.46%) and settled at 38852.27. The S&P 500 rose 52.95 points (+1.03%) and settled at 5180.74. The NASDAQ jumped 192.92 points (+1.19%) and finished the session at 16349.25.  

Breadth was positive with advancing issues beating declining issues by 3.5:1 on the NYSE and 9:5 on the NASDAQ. The advancing volume was 76% on the NYSE and 64% on the NASDAQ. VIX was flat at –0.01 points (-0.07%) and settled at 13.48. Crude oil inched up by +0.44 (+0.56%) and the June contract closed at $78.55 a barrel. Gold prices rose 24.40 points (+1.06%) and finished at $2333.00 an ounce. Bitcoin (BTC) finished the day at 63342.53.  

Key secondary indexes also participated in the rally with the small cap Russell 2000 Index breaking further above key resistance level, at its 50-day MA while the hard-hit DJ Transportation Index edged up closer to its 200-day MA. With the 14-day Relative Strength for both indexes landing in the low to mid 50 area and increasing, there appears to be more room to run in the short to intermediate term, which is a positive for the market going forward. Tomorrow, market direction will hinge on what earnings Palantir delivers after the close with the Walt Disney Company (DIS) company set to announce earnings on Tuesday.  

Earnings releases to watch for on Tuesday include: Arista Networks (ANET), Disney (DIS), Duke Energy (DUK), Ferrari (RACE), McKesson Corp (MCK), Occidental Petroleum (OXY) and UBS Group (UBSG).  

Tuesday Market Moving Economic Calendar: Consumer Credit and Neal Kashkari Speaks.  

By Richard Cuvilly