US Stocks Struggle To Hold Gain At Higher Levels
4:28 pm Sunday, May 02nd, 2021
On Friday, US Stocks ended a volatile week on a mixed note, with Wall Street traders giving up on an early surge as markets struggle to balance the strengthening economic recovery against a broad-based surge in prices.
Growth stocks had put up a decent performance over the past session-and-a-half, providing hope for a sustained rebound rally. They were up again to start the day, but the intraday turnaround that’s coincided with another wave of selling in cryptocurrencies has dampened risk sentiment.
The S&P 500 information technology (-0.6%), consumer discretionary (-0.6%), and communication services (-0.3%) sectors, which contain the mega-cap stocks, are underperforming alongside the real estate sector (-0.3%). The Philadelphia Semiconductor Index is down 0.6%.
U.S. Treasuries ended the week on a mixed note after spending the Friday session near their flat lines. Treasuries followed yesterday’s rally in longer tenors with a mostly higher start. The first hour of action saw longer tenors climb above yesterday’s highs, but the gains were trimmed in short order. Treasuries dipped into the red in the mid-morning trade, but the reversal did not invite additional selling.
Deere & Company (NYSE:DE) was one of the standouts within the industrials sector after the company beat top and bottom-line estimates and raised its guidance across multiple segments for FY21. Elsewhere, Applied Materials (NASDAQ:AMAT) also beat earnings expectations and issued upbeat guidance, but shares have been undercut by the relative weakness in growth stocks.
Stepping back, today’s price action has been consistent with the push-pull/consolidation activity seen over the past month+ that’s provided little forward progress for the major indices. The S&P 500 is trading is at the same level since April 15 while the Nasdaq continues to trade at the same levels from late January.
Existing home sales decreased 2.7% m/m in April to a seasonally adjusted annual rate of 5.85 million (Briefing.com consensus 6.09 million) from an unrevised 6.01 million in March. Total sales in April were up 33.9% from a year ago when they were severely depressed in the early stages of the pandemic. In the January-April period, they were up 20.0% year-over-year.
The preliminary IHS Markit Manufacturing for May increased to 61.5 from 60.5 in April. The preliminary IHS Markit Services PMI for May increased to 70.1 from 64.7 in April.
