Wall Street On Track To Rebound As Traders Train Eyes On Key Data Ahead Of Long Weekend: Analyst Says Brace For More Gains In Second-Half

Zinger Key Points
  • The Fed minutes provided the catalyst and not even Nvidia could refocus market on positives, says analyst explaining Thursday's weakness.
  • The global markets were seen swathed in a sea of red on Friday, with Asian stocks ending notably lower for the session

Wall Street is eyeing a return to winning ways on Friday after the lackluster sentiment seen in the past two sessions. The index futures held modestly higher in early trading. The spotlight is likely to be on a Fed speech scheduled for the day and the inflation expectations readings of the University of Michigan’s consumer sentiment report. Traders may also look ahead to the durables goods orders report to gauge the strength of the economy, especially in light of the recent weak economic data.

FuturesPerformance (+/-)
Nasdaq 100+0.29%
S&P 500+0.29%

In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY climbed 0.28% to $527.45 and the Invesco QQQ ETF QQQ traded up 0.30% at $455.0, according to Benzinga Pro data.

Cues From Previous Session

U.S. stocks clocked back-to-back losses on Thursday notwithstanding the nearly 10% rally seen in market heavyweight Nvidia Corp. NVDA. Data showing weekly jobless claims falling more than expected in the recent reporting week and better-than-expected S&P Global final private sector purchasing managers indices weighed down on sentiment. The strong data trimmed the odds of multiple Fed rate cuts this year, dampening the market mood.

The major indices opened higher and then took divergent routes. The Dow Industrials of which Nvidia is not a component fell steadily in the morning and sharply in the afternoon, with all 30 index components closing in the red. The Nasdaq Composite and the S&P 500 Index hovered above the unchanged line until the mid-session, thanks to the Nvidia prop, but succumbed to rate worries thereafter.

Ten of the 11 S&P 500 sector classes retreated, with IT stocks alone bucking the downtrend.

Reacting to the pullback, Jamie Cox, Managing Partner for Harris Financial Group, said, “Markets tend to take breather heading into a long holiday weekend.  The Fed minutes provided the catalyst and not even Nvidia could refocus markets on the positives.”

IndexPerformance (+/-)Value
Nasdaq Composite-0.39%16,736.03
S&P 500 Index-0.74%5,267.84
Dow Industrials-1.53%39,065.26
Russell 2000-1.60%2,048.41

Insights From Analysts:

Fund manager Louis Navellier sees volatility ahead. “Overall, the earnings season is largely over. The market will start to oscillate going forward. Any stocks that post good earnings are good buys on dips,” he said.

Meanwhile, Carson Group’s Ryan Detrick pointed to another bullish historical trend. The market strategist noted that Wednesday marked the 100th trading session and the S&P 500 was still holding its double-digit year-to-date gain. Gains of similar magnitudes were seen in 2021, 2019, 2013, 1998, 1997, 1996, and 1995, he noted.

All these years saw the gains continuing into the second half, he added.

Upcoming Economic Data:

  • The Commerce Department is scheduled to release the durable goods orders data at 8:30 a.m. EDT. Economists, on average, expect a 0.9% month-over-month drop in durable goods orders for April, reversing some of the 2.6% increase in March. The growth in core durable goods orders may have slowed from 0.2% to 0.1%.
  • Federal Reserve Governor Christopher Waller is scheduled to speak at 9:35 a.m. EDT.
  • The final consumer sentiment reading compiled based on the University of Michigan’s survey, due at 10 a.m. EDT, is expected to come in at 67.4 for May, down from 77.2 in April. The one-year and five-year inflation expectations are likely to come in at 3.5% and 3.1%, respectively.
  • The Atlanta Fed will release its second-quarter GDP data at 10:30 a.m. EDT.

See also: Best Futures Trading Software

Stocks In Focus:

  • Intuit Inc. INTU fell about 6% in premarket trading following its earnings release, and Workday, Inc. WDAY tumbled over 12%, while Ross Stores, Inc. ROST climbed about 7% and Deckers Outdoor Corporation DECK jumped over 8.5%.
  • Booz Allen Hamilton Holding Corporation BAH and Buckle, Inc. BKE are among the other notable companies reporting before the market opens.

Commodities, Bonds, and Global Equity Markets:

Crude oil futures were on a five-session losing streak and traded just above $76-a-barrel in the early European session. Gold futures rose modestly and yet traded just above $2,340 an ounce, way off from their all-time highs. The U.S. 10-year note yield was founding flatlining around 4.473%. after it surged up over 1.2% on Thursday. Bitcoin BTC/USD retreated below the $67.5K mark by virtue of its 3%+ decline over the past 24 hours.

The global markets were seen swathed in a sea of red, with Asian stocks ending notably lower for the session, led by the Japanese, Hong Kong, Chinese, South Korean and Australian markets. The negative lead from Wall Street overnight and concerns about a potential delay in the U.S. Fed pivot weighed down on sentiment.

European stocks fell moderately in early trading amid the release of some sore domestic data.

Read Next: ‘Wow:’ Elon Musk Reacts As Nvidia’s Eye-Popping Market Cap Leaves Entire German Stock Market, GDPs Of 96% World Nations Biting The Dust

Photo courtesy: Shutterstock

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Posted In: EquitiesNewsFuturesPreviewsTop StoriesEconomicsFederal ReservePre-Market OutlookMarketsMoversTrading IdeasChristopher WallerJamie CoxLouis NavellierRyan DetrickStories That MatterUS market preview
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