Stocks Closed Mostly Higher Yesterday, All Eyes On This Morning's Employment ReportStocks closed mostly higher yesterday, led by the Dow with 1.73% (and making a new all-time high and close in the process), followed by the small-cap Russell 2000 with 1.45% (new all-time high, but 'just' second highest close). The S&P 500 was up 0.41%. Only the Nasdaq missed the mark, giving up -0.09%. YTD, the Dow is up 7.28%; the S&P 500 is up 10.8%; the Nasdaq is up 15.4%; the Russell is up 18.3%; and the mid-cap S&P 400 is up 13.9%. While Broadcom, on Wednesday afternoon, posted a quarterly EPS growth rate of 54.4% vs. this time last year, and a sales growth of 47.9%, and CEO Hock Tan saying that demand for AI semiconductors remains "simply insatiable," and raising Q3 revenue guidance 7.3% above expectations, it apparently wasn't enough for investors as they sank -12.59% yesterday. Although, YTD, they are up a solid 21.0%. Semiconductors, and AI-related names in general, have been on a tear. But we were due for some profit taking. And we saw some of that yesterday. While tech took a breather yesterday, financials and healthcare shined. And showed the market is bigger than just tech. On the economic report front, Weekly Jobless Claims rose 13,000 to 225K vs. last week's 212K and views for the same. Although, the 4-week moving average came in at a more modest 214.75K vs. last week's 208.25K. And the Challenger Job-Cut Report showed 97,006 announced layoffs for May vs. 60,620 for April. But the jobs report everybody is really waiting for is this morning's Employment Situation report from the Bureau of Labor Statistics (BLS). The consensus is calling for a headline number of 85,000 new jobs being created in May (90K in the private sector, and -5K in the public sector). And it expects the unemployment rate to hold steady at 4.3%. On Wednesday, the ADP report estimated that private payrolls grew by 122,000 jobs. If that holds true for the BLS report, that would be a welcomed upside surprise. And it would be more in line with last month's BLS report of 123,000 private sector jobs. But we'll find out soon enough. The report comes out at 8:30 AM ET. In addition to the jobs report, we'll also get Consumer Credit, and the Baker Hughes Rig Count report. In other news, President Trump announced a $700 million federal investment package to expand and support the U.S. coal industry. ($425M to upgrade 13 existing coal plants; $75M for a new export terminal; and $200M for two new coal plants, and to restart another.) With one more day to go, most of the major indexes are on pace to close higher for the week. That would make it 3 up weeks in a row for the Dow; 3 up weeks in a row for the mid-cap S&P 400; 3 up weeks in a row for the small-cap Russell 2000 (10 up weeks out of 11); and 10 amazing up weeks in a row for the S&P 500. The only miss could possibly be the Nasdaq. But they only need another 0.52% more to get their higher weekly close, which would make it 3 up weeks in a row for them (and 9 up weeks out of 10). A little bit of god news today could help make that happen. Best,  Kevin Matras
Executive Vice President, Zacks Investment Research |
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