Stock market indexes made little progress Monday morning, trading choppy into midday. Norwegian Cruise Line (NCLH) surged into the 200-day moving average in heavy volume after earnings and could break out. Dow Jones banking giant JPMorgan Chase (JPM) was a white knight for First Republic Bank (FRC).
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Norwegian spiked 8% after a posting a smaller-than expected Q1 loss on higher sales. Shares bumped up to the 200-day line and held near highs into the lunch hour. NCLH stock traded more than 100% average daily volume in the first 2 1/2 hours of Monday’s session, in a bullish sign. The company sees strong demand as it works off its massive Covid debt load.
Norwegian earnings are expected to soar 118% in 2024.
Carnival (CCL) surged higher in sympathy, gaining 3.5%.
The Dow Jones Industrial Average inched ahead 0.3% while the Nasdaq pulled back 0.1%. The S&P 500 crept up 0.2%. The Russell 2000 fared better than the major indexes, gaining 0.3%.
The Nasdaq remained above the 12,000 psychological level. Nasdaq volume ticked higher while NYSE volume plummeted compared with the same time on Friday.
The Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) dipped 0.1%, while the Innovator IBD 50 ETF (FFTY) gave back earlier gains, and relatively flat.
Crude oil slid 1.7% to $75.46 per barrel. Gold futures slipped 0.4% and traded just below the $2,000 level.
Bitcoin sank 4.1% to $28,260. Cryptocurrency exchange Coinbase (COIN) fell in sympathy with crypto, losing 7.1%.
European and most Asian markets were closed for the May Day holiday.
The April Institute of Supply Management (ISM) manufacturing index rose to 47.1 vs. the 46.8 consensus, and above March’s 46.3 level in March. This is the sixth consecutive month below 50, signaling continued contraction in the manufacturing sector.
Economic Data On the Docket
The 10-year U.S. Treasury yield added 7 basis points to 3.52%. The CME FedWatch tool shows almost 90% odds for a quarter-point rate hike at the Fed meeting this week. The million dollar question is whether or not the Fed will pause rate hikes.
The Federal Open Market Committee (FOMC) starts its two-day meeting on Tuesday, with the rate hike decision slated for Wednesday 2 p.m. ET. Fed Chairman Jerome Powell has a news conference at 2:30 ET.
Look out for the March JOLTS job openings survey and factory orders reports Tuesday, and the April ISM Services Index reading Wednesday.
Friday brings the April jobs report, with nonfarm payrolls expected to rise by 175,000 after March’s 236,000 increase.
Stock Market Movers: JPMorgan Saves The Day
In the bank Panic of 1907, Mr. J.P. Morgan himself stepped in to help save the failing bank industry after the banks had massive withdrawals, as the public lost faith in the banking system.
In a move reminiscent of that rescue over 100 years ago, JPMorgan came in as the savior over the weekend.
First Republic Bank was seized by the FDIC and JPMorgan agreed to buy most assets, including all of the California-based bank’s $92 billion in deposits. The banker will also acquire about $173 billion in loans and $30 billion in securities.
This marks the second-largest U.S. bank failure, surpassing Silicon Valley Bank and Signature Bank. Only Washington Mutual’s collapse during the 2008 financial crisis was larger.
JPM rose 2.7% in heavy volume on the news, and it’s the Dow leader today. The bank stock hit the 141.88 buy point of a cup-with-handle base and is in the 5% buy zone reaching to 148.97.
Aerospace Stock Hits Buy Point
Howmet Aerospace (HWM) rose 1.5% and broke out of a cup base, hitting the 44.47 buy point. Shares of the aerospace and transportation firm are in the buy zone reaching to 46.69, according to MarketSmith pattern recognition.
Howmet reports Q1 earnings Tuesday before the bell.
General Electric (GE) jumped 2.2% and probed a five-year high. Shares have gained over 54% this year so far, and have been riding the 21-day line on the way up.
On Semi (ON) popped 7.2% after reporting better-than-expected Q1 earnings and sales. Management offered Q2 earnings and revenue guidance above analyst estimates.
“We continued our momentum with first quarter results exceeding expectations despite macroeconomic uncertainties,” said Hassane El-Khoury, CEO of On Semi.
The automotive chip stock retook the 21-day exponential moving average on the jump. ON stock is the biggest S&P gainer today.
Li Auto (LI) eased from early morning gains, up 0.1% after reporting a 516% year-over-year increase in April vehicle deliveries. 25,681 deliveries set a record and mark the second consecutive month over 20,000.
The move lifted the Chinese EV maker stock above the 50- and 200-day lines.
Security software developer Check Point (CHKP) tanked 4.2% after reporting a beat on Q1 earnings but a miss on sales…
Read More: Stock Market Stuck In Neutral; Cruise Ship Stock Probes Breakout In Heavy Volume