Stock Market Update

[BRIEFING.COM] The stock market is higher today after yesterday's big recovery from steep losses. The ongoing resilience to any selling interest has supported the upside bias, along with positive responses to better-than-expected quarterly results from Microsoft (MSFT 427.95, +32.70, +8.3%) and Meta Platforms (META 575.14, +26.14, +4.8%). 

The major indices have given back some of their gains, but still trade up between 0.3% and 1.8%. With today's gain, the S&P 500 trades above its 50-day moving average (5,592) after closing shy of that level yesterday.

Outsized gains in mega caps and chipmakers have influenced index-level performance, but many stocks are participating in upside moves. Advancers have a 3-to-2 lead over decliners at the NYSE and a 4-to-3 lead at the Nasdaq.

The ongoing inclination to buy has also been supported by optimism around the trade war situation and some speculation that the Fed might see a case to cut the target range for the fed funds rate sooner rather than later following weakening economic data.

This morning's releases included a relatively soft initial jobless claims number, along with another contractionary reading in the ISM Manufacturing Index in April (i.e. a reading below 50%).

Reviewing today's economic data:

• Weekly Initial Claims 241K (Briefing.com consensus 225K); Prior was revised to 223K from 222K, Weekly Continuing Claims 1.916 mln; Prior was revised to 1.833 mln from 1.841 mln
  • The key takeaway from the report is that the relatively large jump in both initial and continuing jobless claims will stoke concerns about a softening labor market, which in turn might elevate the market's thinking that the Fed can be convinced that it needs to be less restrictive with its policy stance.
• April S&P Global US Manufacturing PMI - Final 50.2; Prior 50.2
• March Construction Spending -0.5% (Briefing.com consensus 0.3%); Prior was revised to 0.6% from 0.7%
  • The key takeaway from the report is that residential spending rebounded after a poor January, which is encouraging for longer term health of the housing market.
• April ISM Manufacturing Index 48.7% (Briefing.com consensus 47.9%); Prior 49.0%
  • The key takeaway from the report is that it paints a poor picture for the second month in a row, as the headline index slipped into contraction while prices rose sharply for the second consecutive month.