Friends

This morning’s jobs report was better than expected with 177,000 new jobs created in April vs. the 133,000 that analysts had predicted. Stocks liked it, bonds did not. From the open, stocks moved higher and so did bond yields (bond prices down). Many have been expecting the labor market to roll over for years now. Instead, the employment picture remains solid. Apparently tariff talks continue to move forward and for the moment market participants are focused on corporate earnings and the economy. Both have remained resilient.

As for today, by the close the Dow Jones Industrial Average was up 564 points to finish the day at 41,317. The S&P 500 was up 82 points to close at 5,686. The Nasdaq Composite Index was up 266 points to close at 17,977. Gold was up $18 to trade at $3,240 per ounce, while oil was down $.75 to trade at $58.49 per barrel WTI.

It was about 5 minutes ago we were dancing around the bear market levels and then a couple of weeks later we have almost erased all the losses from the beginning of the year (we are still down from February’s highs). The markets were pricing in recession, but the economy continues to refuse to participate. Again, things can change quickly as we have seen, but the bulls have to feel better about things at the moment. What is interesting is that money flows show that retail investors held firm during the recent downturn while institutional investors sold at the lows. Remind me who is the smart money again? Now we enter the “sell in May and go away” time of the year. Will stocks run into some headwinds soon like rising bond yields? Time will tell. In the meantime, we’ll marinate some ice cubes this weekend and prepare for next week’s Fed meeting. There’s never a dull moment.

Have a great weekend everyone.

Jim