April 29, 2024

The S&P 500 nudged higher for a fifth day out of the last six as the major averages came off their best week since last November. Helping to boost equities was a tick lower in rates as investors eyed this week's FOMC Meeting. The 10-year Treasury rate slid to 4.62% and the two-year T-Bill settled at 4.985% as market participants were set to focus on Fed Chair Jerome Powell's comments on inflation. Most sectors traded higher with Consumer Discretionary (XLY) rising to the top fueled by a +15.31% spike in Tesla (TSLA) after China approved the companies self-driving proposal. Utilities (XLU), REITs (XLRE) and Materials (XLB) also outperformed. The Communication Services (XLC) sector was the weakest market group as Meta Platforms (META) took another hit after the EU threatened to bring action on the spread of misinformation. Apple Co (AAPL) got a lift on comments that it would incorporate Open AI into its iPhones and an upgrade to Outperform ahead of earnings later in the week. The different indexes nearly gave up their upside momentum in the afternoon before a late rally left the major averages with modest gains. The DJIA closed with a gain of 146.43 points (+0.38%) at 38386.09, while the S&P 500 added 16.21 points (+0.32%) and settled at 5116.17. The NASDAQ picked up 55.18 points (+0.35%) finishing at 15983.08.

Breadth was positive with advancing issues beating declining issues 5:2 on the NYSE and 13:8 on the NASDAQ. Advancing volume was 69% on the NYSE and 65% of the NASDAQ. The VIX fell 0.36 (-2.40%) and closed at 14.67. Crude oil prices fell 1.11 (-1.32%) and the June contract closed at $82.74 a barrel. Gold prices eased 1.00 (-0.04%) and finished at $2346.20 an ounce. Bitcoin (BTC) closed the session at $63,000.

It was a quiet session ahead of the FOMC meeting and jobs data later in the week. Of note however, was that the S&P 500 and NASDAQ gains stalled just below their respective 50-day MA. Keep an eye on that level as where we could see a trend change occur. A hawkish Powell could pull the plug on the rebound, while a more dovish outlook could see the major averages trade back above that key resistance level and kick off another up leg on hopes rate cuts are still on the table for July or September.

Earnings releases to watch for on Tuesday include: 3M (MMM), American Tower (AMT), Eli Lilly (LLY), Advanced Micro Devices (AMD), Air Products and Chemicals (APD), Molson Coors Beverage (TAP), Brinker International (EAT), Tenet Healthcare (THC), US Steel (X), Timken Co (TKR), McDonald's (MCD), Clorox Co (CLX), Lear Corp (LEA), Coca-Cola (KO) and Trane Technologies (TT).

Tuesday's Market Moving Economic Calendar: FOMC Meeting Begins. Employment Cost Index, Case-Shiller Home Price Index, Chicago PMI and Consumer Confidence.

By David L. Blake, CMT