Market Update: Wednesday, May 3, 2017

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  • Global equities take a mid-week dip. (10:21am ET) Stocks in the U.S. are off to a slow start this morning as Apple, the world’s second largest company by market cap, weighs on the Dow and S&P 500 after it reported disappointing quarterly earnings last night. This after the S&P ticked higher yesterday on the heels of gains in the industrials (+0.5%) and technology (+0.3%) sectors; energy (-0.5%) and consumer staples (-0.6%) lagged. Overseas, Asian markets searched for direction overnight without the leadership of the Nikkei and Hang Seng, which were closed for holidays; the Shanghai Composite (-0.3%) fell modestly. European stocks are slightly lower late in the day with the STOXX 600 down 0.2% as investors’ remain cautious ahead of this weekend’s French election. WTI crude oil ($47.86/barrel) is getting a boost following three days of declines after readings on U.S. stockpiles showed a sizeable decline, COMEX gold ($1251/oz.) continues to inch lower despite dollar weakness, and 10-year Treasury yields are up a basis point (0.01%) to 2.29%.

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  • Eurozone GDP up 0.5%, meeting expectations. First quarter preliminary Gross Domestic Product (GDP) for the Eurozone grew 0.5% as expected. Europe has struggled to grow its economy over the past few years, but today’s data, coupled with generally strong figures over prior recent quarters, suggests full year growth could top economists’ expectations for 1.7% this year and could lead the central bank to shift monetary policy expectations at its meeting next month.
  • ADP employment report signals possible improvement in jobs growth. ADP, the nation’s largest payroll processing firm, estimated the economy added 177,000 new jobs in April, ahead of consensus expectations of 170,000. While the report points to potential upside in Friday’s jobs report, ADP’s jobs number has become a less reliable forecaster following methodological changes. Last month, the ADP “preview” had the economy adding 263,000 jobs, but the government’s Employment Situation report only came in at 98,000 jobs added. Nevertheless, labor markets remain strong overall. Estimates for Friday’s jobs report stand at non-farm payroll growth of 185,000 with a small uptick in the unemployment rate to 4.6% as more job seekers enter the market.
  • Slow action continues. The S&P 500 gained 0.12% yesterday, the fifth consecutive day it has closed within 20 basis points of the previous day’s close. It hasn’t made it to six days in a row since December 2010. Incredibly, over the past five trading days, the S&P 500 has traded in a range of 0.66%, tying the record for the smallest range from January 1994 (using reliable intraday data since 1970).
  • Seasonal analysis puts a new perspective on “Sell in May.” If you’re thinking about following the old adage “sell in May and go away,” you may instead want to dig a little deeper to see which sectors and industries could be poised to outperform in this historically choppy month for equities, which we do today on the LPL Research blog.

 

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Click Here for our detailed Weekly Economic Calendar

Wednesday

  • ISM Non-Mfg. PMI (Apr)
  • FOMC Rate Decision (May 3)
  • Eurozone: GDP (Q1)

Thursday

  • Eurozone: Markit PMI (Apr)
  • Eurozone: Retail Sales (Mar)

Friday

 

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