Tech Lifts Stocks as Apple Jumps in Late Hours: Markets Wrap – Yahoo Finance

May 2, 2024

(Bloomberg) — The world’s biggest technology companies pushed their stocks higher as traders braced for Friday’s jobs report. Bonds rose, but the dollar fell the most in 2024.

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Late in the day, the company announced that sales in the previous quarter did not fall as sharply as feared, supported by stronger-than-expected demand in China, raising concerns that the company’s economic slowdown may be easing. Apple rose, causing optimism.

Ahead of the monthly jobs report, data showed U.S. labor costs rose by the most in a year as productivity growth slowed, raising the risk that inflation will remain high. Economists surveyed by Bloomberg expect nonfarm payrolls to rise by 240,000 jobs, which would be the slowest pace since November.

The Federal Reserve decided on Wednesday to keep its benchmark interest rate target range unchanged at 5.25% to 5.5%, citing a slew of data suggesting lingering price pressures. But Chairman Jerome Powell said it was unlikely the Fed’s next action would be to raise rates.

“The Fed appears to have all but eliminated the possibility of raising rates, but they have also made clear that they intend to keep rates high for an extended period of time,” said Chris Larkin of Morgan Stanley’s E-Trade. “Markets will be hungry for any data that suggests the economy is no hotter than it was in the first quarter,” he said.

The S&P 500 topped 5,060 and the Nasdaq 100 rose 1.3%. Qualcomm, the world’s largest maker of smartphone processors, soared on the positive outlook. EBay fell after a disappointing outlook. The yield on the 10-year US Treasury note fell 5 basis points to 4.58%.

According to a survey conducted by 22V Research, 30% of investors surveyed believe Friday’s jobs report will be a “risk-on” response, while 27% expected a “risk-off” reaction and 43% expected a “risk-off” reaction. answered, “Very mixed/can be ignored.” The aggregated results revealed that among labor indicators, investors pay the most attention to average hourly wages.

“The market is still likely to react more to weak indicators than to strong indicators as investors become increasingly hawkish,” said Oscar Muñoz and Gennady Goldberg of TD Securities. “However, the recent series of upside surprises in economic data are unlikely to last long as expectations continue to be reset higher again.”

The options market is predicting big swings in stock prices after Friday’s U.S. jobs report, with traders expecting more clarity on how much the Fed will cut interest rates this year.

Based on the cost of at-the-money puts and calls expiring on Friday, the S&P 500 index moved 1.1 in either direction after the announcement, said Stuart Kaiser, head of U.S. equity trading strategy at Citigroup. It is expected to move by 2%.

The figure, based on the S&P straddle price as of Wednesday’s close, is the largest implied change before the jobs report since March 2023, he said.

After the Fed’s decision to hold interest rates on Wednesday, the current rate suspension period reaches 280 days, which remains the second-longest in history, according to Ryan Grabinski of Strategas Securities.

“A long hiatus is good for stocks,” Grabinski said. “From June 2006 to September 2007, the longest period of hiatus was associated with the highest returns in the stock market. A Fed rate cut likely means a deepening of the problem. is reaching.”

Meanwhile, Bank of America’s Savita Subramanian says a strong economy will sustain a bull market in U.S. stocks even without a Fed rate cut.

“With reasonable market conditions, probably better growth than we’ve seen in the past, higher interest rates, slightly higher inflation, I think we’re headed for a soft landing,” Subramanian said Thursday on Bloomberg TV.

Hedge funds are increasingly on the defensive as uncertainty surrounding the fate of geopolitics and interest rates, as well as April’s stock market crash, spook investment professionals.

Positioning data showed hedge funds sold at the fastest pace in eight months in April, maintaining a net short position in global equities, according to statistics compiled by Goldman Sachs Group’s Prime Brokerage Desk. It shows that you have added defensive stock positions to your portfolio. This ended a four-month streak of purchasing records. Health care saw the biggest inflows, with consumer discretionary stocks the biggest net sell-off in seven months, according to Goldman data.

Company highlights:

Peloton Interactive announced that Chief Executive Officer Barry McCarthy will step down as part of a major restructuring that will reduce the company’s global workforce by 15% in an effort to cut costs.
MGM Resorts International reports first-quarter sales and profits that beat analysts’ expectations, benefiting from new partnership with Marriott International that helped Macau’s post-pandemic recovery and hotel room vacancies did.
Carvana Inc. reported strong earnings with sales exceeding expectations as it moves ahead with its restructuring plan and regains sales momentum.
DoorDash Inc., the largest U.S. food delivery service, announced disappointing profit estimates for the current quarter as it invests in expanding its list of non-restaurant partners and improving efficiency.
Moderna Inc. reported a narrower first-quarter loss than Wall Street expected as the biotech giant’s cost cuts offset a steep decline in its coronavirus business.
Apollo Global Management Inc. reported higher first-quarter profits as it collected more management fees and originated a record $40 billion in private credit, a key area of growth.