Indexes built nicely on a mixed open and finished near highs for the day Monday. The S&P 500 gained 0.78% while the NASDAQ added 0.88%. In economic news, ISM manufacturing for April was 50.8, down from 51.8 in March. Construction spending for March rose 0.3 percent. Any ISM reading over 50 signals expansion so we are seeing “barely” expanding levels now.
“What you’ve got going on is the dollar has been weak (and) rotation into beaten-down, more economically-sensitive sectors,” said Jonathan Lamensdorf, managing director and portfolio manager at Highland Capital Management.
The modest drop in the ISM index “is a bit disappointing, but that April figure is still the second-highest reading in the past eight months,” said Paul Ashworth, chief U.S. economist at Capital Economics, in emailed comments.
Some corners of the internet have argued that U.S. government economic information is being leaked ahead of when it is released to the general public; the ECB’s internal study shows this “conspiracy theory” to be true. ZeroHedge will be pleased. Of course no one will pay much attention to this outside of certain corners of the internet, and life will go on as before.
The S&P 500 remains in better shape than the NASDAQ as it regained its 20 day moving average. It is interesting to note that the NASDAQ essentially bounced off our blue dotted trendine which connects major lows of recent years. If it breaks back below that line it would be time to take serious notice.
The Russell 2000 bounced off the 200 day moving average on its first attempt to penetrate which is pretty normal. The action the next 5-10 days will be more telling.
Interesting to note the U.S. dollar has hit the very bottom of the range is has been in, for over a year now.
Amazon.com (AMZN) continued the move it started post earnings Friday as it reaches for old highs near $700. Billionaire investor Warren Buffett said at a Berkshire Hathaway shareholder meeting on Saturday that the company’s accomplishments in a short time have been remarkable.
Apple (AAPL) is on its first 8 day losing streak since 1998. Industry tracker IDC said world-wide shipments of tablets fell another 15% during the first quarter of the year as “overall disinterest” for the product hit record highs.
We neglected to notice the surge in gold Friday; it build on it today!
Wynn Resorts (WYNN) popped as Macau casino revenue decreased by less than analysts anticipated in April. Gaming revenue declined by 9.5% to 17.3 billion patacas ($2.2 billion) last month, marking a 23rd straight month of declines. This is nonetheless a smaller drop than the 13.5% decrease forecast by analysts and the 16.3% decline in March. Macau casinos have been pressured for years as China’s crackdown on corruption and the country’s slowing economy have kept VIPs away from the gambling hub.
Key earnings Tuesday include: Pfizer, Halliburton, Sprint, Valero Energy, CBS, Etsy, and Zillow.