Market Perspective for May 3, 2019

Stocks moved sharply higher on Friday following excellent April employment data. For the week, the Russell 2000 Index gained 1.40 percent to lead the major indexes. The Nasdaq finished with an increase of 0.22 percent after being down 2 percent for the week on Thursday. The S&P 500 Index rallied 0.20 percent, while the Dow Jones Industrial Average slipped 0.14 percent.

SPDR Financials returned 1.32 percent on the week, SPDR Healthcare (XLV) 1.29 percent and SPDR Industrials (XLI) 1.14 percent. SPDR S&P Regional Banking (KRE) advanced 2.39 percent, VanEck Semiconductors (SMH) 1.47 percent, and iShares U.S. Aerospace & Defense (ITA) 1.07 percent.

The economy created 263,000 new jobs in April, resulting in the unemployment rate falling to 3.6 percent. Wage growth was on target at 0.2 percent for the month. The ADP employment report out earlier in the work was similarly strong; it showed private employers hired 275,000 new workers.

Consumer confidence increased in April according to the Conference Board’s index. Manufacturing PMIs show the economy was in a comfortable expansion last month. Motor vehicle sales slowed to a 16.4 million annualized pace in April, but inside the sales range of the past 5 years.

Crude oil continues to decline. It traded near $67 a week ago but closed at $61.94 on Friday. SPDR Energy (XLE) fell 3.07 percent for the week.

The U.S. Dollar Index slid 0.6 percent as the rebound in European economic activity lifted the euro. The dip in the greenback helped foreign markets outperform. iShares MSCI EAFE (EFA) and iShares MSCI Emerging Markets (EEM) increased 0.81 percent.

Earnings were also strong. Apple (AAPL) beat earnings and raised guidance. Shares climbed 3.66 percent. Pharma giants Merck (MRK) and Pfizer (PFE) rallied 4.40 percent and 3.55 percent, respectively, after solid reports. Qualcomm (QCOM), Advance Micro Devices (AMD) and Mastercard (MA) were among other companies that delivered positive results.

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