Flourish Wrap Up Last Week. What's Next This Week? (08 Apr)

We saw that the U.S. stock market has wrapped up last week with a flourish as S&P 500 and Nasdaq Composite went up by 1.1% and 1.2% respectively, both has closed near their daily highs.

The buy-the-dip strategy investors deploy after experiencing a shaky start to the second quarter, despite a weekly downturn, this is a nice upside. The most significant factor driving this positive momentum is robust March employment report which added 303,000 positions, this indicate a healthy labor market and would be favorable for corporate earnings and future outlooks.

We are expecting major banks like JPMorgan Chase, Citigroup and Wells Fargo reporting their earnings this week on 12 April 2024. They have already shown promising pre-earnings gains, with all 3 closing in the positive gains last Friday (05 Apr).

Last week rally was broad. Mega caps and semiconductors stocks are providing significant contributions. We are seeing all 11 sectors of the S&P 500 experienced gains, with the increases coming in between 0.2% and 1.6%, this show the breadth of the rally.

We could see that investors’ buying sentiment continue to remain undeterred even when 10-Year Note yield and 2-Year Note Yield continue to rise further.

This strong buying sentiment underscores the positive reaction to the economic data released earlier.

With the March employment report showing a 303,000 increase in nonfarm payrolls, unemployment rate also dip to 3.8%, we also saw a 0.3% increase in average hourly earnings. The average workweek was extended to 34.4 hours.

All these support solid earnings growth outlook, but this might not give us any hint whether Fed is planning for an imminent rate cut.

Today (08 April 2024), there is no significant US economic data to be release, so market would be focused on corporate earnings and the upcoming broader economic indicators like Consumer Price Index (CPI) scheduled for 10 Apr 2024 0830 hrs (US Time).

Consensus stands at 3.4% and forecast, which is higher than Feb actual.

I would think we still can look at the mega caps and semiconductor sector this week, especially names like Meta Platform and Nvidia, later in the week, we can look at the major banks like JPMorgan Chase and Citibank.

I would be monitoring these 2 ETF fund as well, The Vanguard Mega Cap Growth ETF (MGK) and the PHLX Semiconductor Index (SOX).

Appreciate if you could share your thoughts in the comment section whether you think this week would wrapped up in a rally, maybe not so broad like last week?

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.