Major stock indexes were under modest selling pressure Friday despite a solid earnings report and big price gain for Dow Jones component JPMorgan (JPM). But the news wasn’t good from Boeing (BA), also in Dow Jones, which fell sharply after warning of lower 737 MAX deliveries. Boeing cited a parts issue from supplier Spirit AeroSystems (SPR).
Money flowed into bonds after March retail sales data came in softer than expected. Retail sales fell 1% in March, worse than the -0.4% consensus. Excluding autos, sales fell 0.8%, double the -0.4% consensus. The 10-year Treasury yield was up 7 basis points to 3.52%.
The CME FedWatch tool currently projects 81% odds for another 25 basis point hike at the May 3 meeting. That would lift the federal funds rate to a range of 5% to 5.25%.
Respondents have pretty much baked in a pause in June, with a 44% chance of a 25-basis-point cut in July. By the end of the year, there’s a projected 50% chance the fed funds rate will be at 4.25% to 4.5%.
The Dow Jones Industrial Average jumped above the 34,000 level Thursday, rising 1.1% in light volume, but there wasn’t much buying conviction, at least on the NYSE.
It was a different story on the Nasdaq composite, which posted an accumulation day, soaring 2% in higher volume. The bullish price action was a welcome development for stock market bulls after the March 29 follow-through day.
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Tesla (TSLA) was down 1% near midday Friday after announcing price cuts of up to 10% for the Model 3 and Model Y in Europe. That’s after price cuts in the U.S. and China in January. Tesla reports earnings next Wednesday, after the close.
In related news, luxury EV maker Lucid (LCID) slumped 9% after reporting disappointing Q1 production and delivery data.
Dow Jones Today
A 6% plunge for Boeing stock was offset by JPM stock, which jumped 7% after the bank reported record Q1 revenue and a nearly 50% surge in net interest income. However, deposits fell 7% to $2.38 trillion.
After six straight price gains, UnitedHealth (UNH) gave back nearly 3% despite strong Q1 results and a bullish full-year outlook.
Also in the Dow Jones, Goldman Sachs (GS) rallied 1% ahead of next week’s earnings report. Results are due Tuesday before the open.
Early laggards in the Dow included Microsoft (MSFT) and Salesforce (CRM).
Apple (AAPL) edged lower in the Dow Jones today after jumping 3.4% Thursday. It’s trying to clear a 166.94 entry.
Movers And Shakers
Outside of the Dow Jones, the Nasdaq composite and S&P 500 were down 0.7% and 0.4%, respectively.
Wall Street also weighed earnings reports in the financial sector from PNC Financial (PNC), Wells Fargo (WFC), Citigroup (C) and Blackrock (BLK). Blackrock and Citi were two of the top gainers in the S&P 500, up 3.5% and 3%, respectively.
Gold stocks came under selling pressure as the U.S. dollar strengthened. Royal Gold (RGLD) gave back more than 2%, but after 11 gains in 12 trading sessions, RGLD was due for a pullback. It’s still holding comfortably above its 10-day moving average.
Inside the MarketSmith Growth 250, Crocs (CROX) rallied another 2% as it forms the right side of a cup base. Leaderboard stock On Holding (ONON) also outperformed, rising 3.5% in heavy volume.
Wingstop (WING) was another top gainer in the MarketSmith Growth 250, up 2%. It’s getting close to the top of an eight-week consolidation.
The coming week is very busy on the earnings calendar, including results from Netflix (NFLX) and Intuitive Surgical (ISRG). Both firms report Tuesday after the close.
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
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