Wall Street Looks To Feed Off Apple's Post-Earnings Power But Key Jobs Data May Upset The Cart: Analyst Says 'A Lot Of These Clouds Will Lift' If This Happens

Stocks look set to carry forward the upward momentum on Friday amid some earnings cheer, although a tinge of nervousness is evident ahead of the all-important non-farm payrolls report. A strong labor market would give the nod for the Federal Reserve to stay “higher for longer,” and a wage inflation measure from the report will also be on investors’ radar. Also, a national non-manufacturing activity reading is due for the day.

Apple, Inc APPL appeased the Street with a quarterly report that was not so bad as feared. The company also announced a massive buyback program and a modest dividend hike. The stock has a little under 6% weighting in the S&P 500 Index.

Cues From Previous Session:

Stocks rose solidly on Thursday in a relief rally following the Fed decision, with falling bond yields also working in favor of the market. The major indices opened higher but reversed course and fell below the unchanged line briefly in late-morning trading. Buying resumed thereafter, sending the averages steadily higher.

In the process, the Nasdaq Composite and the S&P 500 Index snapped a two-session losing streak. Communication services, IT, and consumer discretionary stocks advanced solidly, while health care and material stocks came under selling pressure.

Insights From Analysts: The market will likely do well, said Fund Strat’s Tom Lee in a CNBC interview, although he predicated his prediction on a condition. “I know investors are wrestling with a lot of questions in their minds because inflation is higher than expected at the start of the year and rates are higher and stocks are higher, he said.

Amid the different forecasts for Fed rates, market participants were wondering whether this was a payback period, he added.

Lee noted that earnings season has been overall good although there is evidence that companies are unable to pass on prices, demand is weak, and wage pressures are prevalent.

“I think, that’s part of the confusion that’s taking place now. But to me, I’m kind of in the camp that despite all this, it’s all going to come down to whether inflation improves in the next couple of months or the rest of the year,” he said.

“If it does, a lot of these clouds will lift.”

Upcoming Economic Data:

• The Labor Department is due to release its monthly non-farm payrolls report for April at 8:30 a.m. EDT. Economists, on average, expect payroll growth of 240,000, down from the 303,000 pace seen in March. The unemployment rate may have remained unchanged at 3.8% and the annual rate of the average hourly earnings – an inflation measure, may have ticked down from 4.1% to 4.0%.
• The Institute for Supply Management will release the results of its non -manufacturing sector survey at 10 a.m. EDT. The non-manufacturing purchasing managers’ index for April is expected to improve from 51.4% in March to 52%.
• Chicago Fed President Austan Goolsbe is scheduled to speak at 7:45 p.m. EDT and New York Fed President John Williams at 8:15 p.m. EDT.

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• Apple climbed about 6% in premarket trading following its quarterly results.
• Other stocks moving on earnings are Amgen, Inc. AMGN (up over 14%), BigBear.ai Holdings, Inc. BBAI (down about 12%), BJ’s Restaurants, Inc. BJRI (up over 10%), Cloudflare, Inc. NET (down about 13%), Coinbase Global, Inc. COIN (down about 3.5%), Five9, Inc. FIVN (up over 5%), Expedia Group, Inc. EXPE (down over 10%), Illumina, Inc. ILMN (down about 4.5%), Live Nation Entertainment, Inc. LYV (up over 3%), Regency Centers Corporation REG (up over 3%), Tandem Diabetes Care, Inc. TNDM (up over 17.5%) and Opendoor Technologies Inc. OPEN (up about 10%).
• American Axle & Manufacturing Holdings, Inc. AXL, Cboe Global Markets, Inc. CBOE, Fluor Corporation FLR, The Hershey Company HSY and Owens & Minor, Inc. OMI, XPO, Inc. XPO are among the notable companies reporting earnings ahead of the market opening.

Commodities, Bonds, and Global Equity Markets:

Crude oil futures rose modestly in early trading after a four-session losing streak and gold futures were found teetering just above the $2,300-an ounce mark.

The 10-year note yield was flattish at 4.571%, after retreating over 1% on Thursday.

Bitcoin BTC/USD climbed and traded above the $59K level.

Asian stocks that were open for trading closed mostly higher, tracking the optimism on Wall Street overnight and the positive earnings report from Apple. The Japanese and Chinese markets remained closed for public holidays. The European markets remained firmly in the green in early trading.

Read Next: Steve Jobs Wasn’t A Fan, But Apple’s Record Stock Buyback Is So Massive It Dwarfs Valuations Of Boeing, Starbucks, eBay And 415 Other S&P 500 Companies

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