Market at a Glance - 4/27/2023
By: Christopher Mistal
April 27, 2023
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Market at a Glance
4/27/2023: Dow 33826.16 | S&P 4135.35 | NASDAQ 12142.24 | Russell 2K 1751.22 | NYSE 15431.64 | Value Line Arith 8840.28
Seasonal: Neutral. May is the first month of the Worst Six Months for DJIA and S&P 500, but NASDAQ’s Best Eight Months runs through June. In pre-election years, May has been challenging, ranking second worst for S&P 500 and third worst for DJIA. NASDAQ has a mixed record however still averages +1.1% in pre-election year Mays since 1971. More recently, DJIA and S&P 500 have advanced in 9 of the last 10 Mays.
Fundamental: Mixed. Inflation is moderating, which suggests the Fed could consider pausing. The labor market remains remarkably resilient especially outside of the technology sector. Unemployment is at 3.5% and over 200K net new jobs were created in March. Next week new labor metrics will be available. However, Q1 GDP was softer than anticipated at 1.1% while rising credit default swap (CDS) prices on U.S. debt suggest a growing concern over the debt ceiling.
Technical: Range bound. Today’s rip higher was nice, but has little meaning as DJIA, S&P 500 and NASDAQ remain below their respective highs from earlier this year. Without follow-through and an eventual break out to new recovery highs, the indexes remain stuck in ranges. DJIA, S&P 500 and NASDAQ are just closer to the top of their respective ranges today. MACD indicators are still negative.
Monetary: 4.75 – 5.00%. On May 3 we will hear from the Fed. According to CMEGroup’s FedWatch Tool, there is an 85.4% chance of a 0.25% rate hike. But this increase will not be the primary reason for everyone tuning in to the Fed on that day. It will be what the Fed has to say about inflation and the potential future course of rates. Recent bank woes suggest the Fed probably could pause and shift toward a neutral policy stance.
Sentiment: Waning. According to Investor’s Intelligence Advisors Sentiment survey Bullish advisors stand at 48.6%. Correction advisors are at 26.4% while Bearish advisors numbered 25.0% as of their April 26 release. In the week prior Bullish advisors reached 50.7%, a level that has historically been seen around trading tops. It was also the highest number of bulls since November 2021, when NASDAQ last traded at an all-time high.