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Briefing.com Summary:
*The stock market is on a remarkable winning streak that has resulted in new record highs for the S&P 500 and Nasdaq.
*Initial jobless claims continue to run at historically low levels.
*The Q1 earnings reporting season has started, and the market's faith in the EPS estimate trend remains intact.
The stock market is a tough act to follow—literally. The Nasdaq Composite has finished higher in each of the last 11 trading sessions, while the S&P 500 has ended higher in 10 of the last 11 trading sessions.
The salient point, though, is that the Nasdaq and S&P 500 have broken out to new all-time highs, fueled by the renewed leadership of the mega-cap stocks and the optimism that the Iran war will end soon and that safe and free passage through the Strait of Hormuz will be restored.
Other factors not to be excused include short-covering activity, easing concerns about private credit risks, and an expectation that earnings growth will remain strong. One can add some economic optimism to the mix, too, after this morning's data.
Initial jobless claims for the week ending April 11 decreased by 11,000 to 207,000 (Briefing.com consensus: 215,000). Continuing jobless claims for the week ending April 4 increased by 31,000 to 1.818 million, but the four-week moving average of 1,813,250 is the lowest since June 1, 2024.
The key takeaway from the report is that it refutes any notion that the labor market is cracking in a way that will lock up discretionary spending. Initial jobless claims—a leading indicator—continue to run at historically low levels.
Separately, the Philadelphia Fed Index jumped to 26.7 in April (Briefing.com consensus: 12.7) from 18.1 in March. The dividing line between expansion and contraction for this series is 0.0, so the April reading implies manufacturing activity in the Philadelphia Fed region accelerated versus the prior month.
The key takeaway from the report is that price increases have become more widespread, yet the demand is still there, evidenced by a pickup in the new orders index to 33.0 from 8.6.
The Treasury market hasn't moved much on the data. The 2-yr note yield is down one basis point to 3.76%, and the 10-yr note yield is unchanged at 4.28%.
A well-behaved Treasury market has been a residual source of support during the rebound run to record highs, along with the drop in oil prices and the arrival of better-than-expected earnings results. The reactions to those reports haven't always been positive, but the tenor of the results hasn't shaken the market's faith in the EPS estimate trend.
Travelers (TRV), PepsiCo (PEP), Charles Schwab (SCHW), U.S. Bank (USB), Taiwan Semiconductor Manufacturing Co. (TSM), Bank of New York Mellon (BK), Abbott Labs (ABT), and J.B. Hunt Transport Services (JBHT) are among the reporting luminaries that topped Q1 earnings expectations.
These stocks aren't all higher in pre-market action, yet that hasn't upset the broader market by any means.
Currently, the S&P 500 futures are up 10 points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 38 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up 121 points and are trading 0.3% above fair value. Maybe an 11-session wining streak for the Nasdaq won't be so tough to follow after all. To be sure, buyers will be coming back for more, at least at today's open.
