Stock Market Rally Continues, Jobs Report May Be Non-Event
In the midday commentary, I noted that S&P 500 was running into some resistance around 2,675, and that level stood firm in the afternoon session. The job report tomorrow will prove critical as to whether the S&P 500 advances further, or suffer a setback.
The job numbers have been trend higher on the BLS, with y/y gains accelerating, and I do not expect that to change in tomorrow’s report. In fact, the strong ADP results support my belief that we will continue to see meaningful job acceleration.
In fact, I continue to believe we can see meaningful job creation, without the unemployment rate falling, as the U6 number is still rather high, historically.
The labor participation continues to be extremely low, and as workers continue to come back to the labor market, I expect that participation rate to continue to rise. Remember the U3 “headline” measure of unemployment is a lousy indicator to measure true unemployment, as it counts those recently unemploy and actively looking for work. Not those that gave up looking 6-12 months ago.
It is also the reason, why wage inflation is likely to stay in check when the reading comes out. I would not be surprised to see it lower this coming month than last.
We can see that the technology ETF XLK failed multiple times around $66, we are going to want to see the technology ETF break above that level of resistance.
Tesla managed to get above the $303.5 level as I noted earlier in the day, and again that is a positive for the stock. The next big event for investors to worry about will be the burn rate when the company reports results sometime at the end of April or beginning of May.
I know the Citron tweeted today about Nvidia going sub $200, but for now, the market seems to disagree. $218 has been like a rock through a lot of market turmoil, and I’d be surprised if $218 cracks, something fundamentally would need to change, such as an earnings miss or poor guidance. But right now, I’m not seeing a move below $200 happening.
It is the same thing with Micron, with the Sell rating by UBS. The area around $49.75 still seems stable, and it is going take more than a lone wolf downgrade to get this thing below that price.
Qualcomm has seen some interesting option volume lately and could be pointing to a decline of 13 percent in the stock.
The opposite could be said with Netflix, as traders are betting shares rise over $320.
Good Luck Tomorrow
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