Market Perspective for May 4, 2020

Equities started the week on a positive note. The Nasdaq increased 1.23 percent to lead the major indexes as investors remain bullish on the technology sector. The S&P 500 gained 0.42 percent, while the Dow Jones Industrial Average returned 0.11 percent.

SPDR Energy (XLE) rebounded, gaining 3.46 percent on the day. West Texas Intermediate crude gained $1.50, to close at $21.28 per barrel.

Technology also performed well on the day. SPDR Technology (XLK) climbed 1.33 percent. Internet-related companies pulled the sector higher. First Trust Dow Jones Internet (FDN) climbed 1.47 percent.

iShares Nasdaq Biotechnology (IBB) rallied 3.02 percent and SPDR S&P Biotech (XBI) popped 5.06 percent. Both funds made new 52-week highs last week.

The May employment report will be released on Friday. The consensus predicts 22 million jobs were lost last month and the unemployment rate will have increased to 15 percent. Average hourly earnings are forecast to increase 0.8 percent, double last month’s figure.

The 10-year yield edged down to 0.64 percent on Monday. It has traded between 0.60 percent and 0.80 percent for most of April. The 30-year bond yield increased to 1.30 percent.

The U.S. Dollar Index rose 0.56 percent. The dollar also rallied versus the offshore Chinese yuan after the U.S. government released a report claiming China covered up the severity of the coronavirus pandemic.

Earnings season continues with many blue-chip companies reporting. Allergan (AGN), Newmont (NEM), Regeneron (REGN), Disney (DIS), Electronic Arts (EA), Activision (ATVI), Occidental Petroleum (OXY), Illinois Tool Works (ITW) and KLA Tencor (KLAC) deliver results on Tuesday.

Wednesday brings PayPal (PYPL), CVS Health (CVS), General Motors (GM), Zoetis (ZTS) and Square (SQ).

Bristol-Myers Squibb (BMY), Roku (ROKU), Booking.com (BKNG), Baidu (BIDU), Hilton (HLT), Fidelity National Information Services (FIS, Danaher (DHR), Trade Desk (TTD) and Becton Dickinson (BDX) report.

The week closes out with Exelon (EXC), PPL Corp (PPL), Kimco Realty (KIM), Noble Energy (NE), Sabre (SABR) and Ventas (VTR).

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