News:
On Friday, markets opened lower, and that was the end of selling.
As the day wore on, it was hard to find a price buyers wouldn’t pay.
The indexes closed solidly green and at their session highs.
- Dow Jones +0.8%
- Nasdaq +0.7%
- S&P 500 +0.8%
- Russell 2000 +1.0%
Sector Round Up
Almost every sector was higher at the end of Friday’s session … There was one holdout.
At the top…
- Energy (XLE) +1.6%
- Financials (XLF) +1.2%
- Materials (XLB) +1.2%
- Real Estate (XLRE) +1.2%
The lone loser…
- Utilities (XLU) -0.1%
Another Bank Failure
Overnight regulators seized the assets of First Republic Bank (FRC).
According to multiple media outlets, JPMorgan Chase (JPM) will assume control of the failed bank’s deposits and operations.
- At writing, shares of FRC are trading at $2.15 per share, a 98% decline from March 1
- Shares of JPM are up about 2% in premarket trading
Futures are flat and so far have had little reaction to the second-largest bank failure in U.S. history.
Here are the rankings…
- Washington Mutual – 2008
- First Republic Bank – 2023
- Silicon Valley Bank – 2023
- Signature Bank – 2023
Technicals:
The Nasdaq, represented on the chart below, closed at its highest level since August 2022 on Friday…
QQQ Daily Candles – Chart by thinkorswim
Markets are showing strength heading into the new month.
Our reading says the bulls have the wind at their back…
- The VIX fell back below 16 for the first time since November 2021
- RSI levels are neutral
- The Put-to-Call Ratio is neutral
Timing:
Today is the first trading day of May. Here’s what you need to know about the month ahead…
When May is bullish, it’s more bullish for “risk-on” stocks.
- Average returns for the Dow and S&P 500 are -0.0% and +0.2%, respectively
- The average return for the Nasdaq and Russell 2000 are +1.0 and +1.3%, respectively
With Nasdaq at its highest level in 9 months, we believe it’s the index to watch in the month ahead.
Now to the newsmakers.
Here are the dates you’ll want to mark on your May calendar…
- 3 – FOMC meeting ends with an interest rate announcement
- 5 – Jobs report
- 10 – CPI inflation data
- 11 – PPI inflation data
- 19 – Options Expiration
- 24 – FOMC minutes released
- 25 – Q1 GDP revision
- 29 – Memorial Day, markets closed
Earnings will continue this week too. In tomorrow’s newsletter, you’ll get our top earnings to watch this week.
Watchlist:
*TOP on watch
*TCJH on watch
ELEV support at $2.50
BZH on watch
SONM support at $1, resistance at $1.20
APLT support at $1.40/$1.60
PRG support ta $26
CRS support at $52
SKYW on watch
LVO support at $1.50
SA resistance at $14
TDUP support at $2.50
CBAY support at $10
Secondary watchlist—float 100+ million
TIO support at $2
TGTX support at $22
RIOT support at $10, resistance at $12
HIMS support at $10.50, resistance at $12
GGG support at $73
NYCB support at $10