Courtesy of Blain.
Indexes started the new quarter in fine fashion as a down open was bought rather aggressively which is the type of action bulls like; weak opens leading to strong closes. The S&P 500 gained 0.63% and the NASDAQ 0.92%. The labor data for the day was in line while the surprise was in the ISM Manufacturing data which finished over 50, signaling expansion. Manufacturing (ex auto) had been weak for about a year.
ISM manufacturing for March came in at 51.8, topping expectations and up from February’s 49.5 print. Steve Murphy, U.S. economist at Capital Economics, said the ISM report was evidence of an unexpected global “turnaround in manufacturing,” following improvement in regional surveys and in international surveys, particularly in China and Germany.
The March employment report showed creation of 215,000 jobs, with the unemployment rate edging up to 5.0% from 4.9%, and average hourly earnings rising seven cents. The labor force participation rate rose to 63%, its highest level since March 2014. That rate was about 66% prior to the financial crisis. The retail sector added 48,000 jobs, and health care gained 37,000. Manufacturing jobs continued to decline, losing 29,000, while construction was up by 37,000.
This morning the S&P 500 broke below this purple uptrend line, but at the close that issue was taken care of. Likewise the NASDAQ had dipped below the 200 day moving average in the morning selling but came roaring back above.
All this on a day oil was hit quite hard. This breaks a correlation we’ve seen almost all year. We have stated recently oil still looks ok as long as it holds $36, but it is getting quite close to that number now. The 200 day moving average in green was the ceiling on this last run and after churning through all the resistance from last December, the resistance from November proved a much harder mess to work through.
Oil hit its lowest level in more than two weeks on renewed oversupply concerns, after reports that Saudi Arabia would not agree to a production freeze unless Iran and other major producers also did so. The market is realizing that “despite the constant chatter about an [oil] output freeze, production continues to be high and there is very little follow-through to curtail inventories,” said Michael Arone, chief investment strategist at State Street Global Advisors.
Could the biotech ETF (IBB) finally break out of this long range in yellow next week?
Regeneron (REGN) surged to its best day since Jan. 10, 2012. Regeneron and Sanofi said Friday their experimental treatment for eczema proved highly effective in two large studies, without serious side effects often seen with standard treatments for the chronic inflammatory skin disease, Reuters reported. “This marks potentially the first in a new class for a drug/disease type,” said Paul Yook, portfolio manager, BioShares Funds.
Shares of Tesla (TSLA) jumped in above-average trade volume after CEO Elon Musk said orders for the Model 3 reached 198,000 within 24 hours.
The drama in the hotel space is finally over as Marriott (MAR) fell 5.67% after China’s Anbang Insurance abandoned its competing $14 billion bid for Starwood Hotels (HOT).
Blackberry (BBRY) – which is somehow still around – tumbled 7.5% after the company posted mixed results as revenue fell.
Have a good weekend and we’ll see you Monday.
