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May 5, 2025
Dow: 41,240
S&P: 5648
Nasdaq: 17,810
10-YR T-Note: 4.35%
Bitcoin: 94,000
VIX: 24.19
Gold: $3,322
Crude Oil: 57.50
Don Selkin, the creator and innovator of the "Fair Value" numbers, as its Chief Market Strategist on the Newbridge platform has given CNBC and its Predecessor, these numbers every day for the over 40 years - never missing a single day, as well as given the fair value for the Nasdaq 100 futures since their introduction in 1996 and the Dow Jones stock index futures since 1997. Mr. Selkin has also been quoted in several publications including but not limited to Bloomberg News, New York Post, Reuters, and The New York Times. Mr. Selkin's Fair Value numbers are included in the U.S.
Futures Report broadcast on CNBC every day before the market
opens attributing "Newbridge Securities" as the source. In addition, NSC provides to its professionals, their clients and the public access to Don Selkin's more in depth financial market views.
Equities extended their gains to a ninth straight day Friday, marking the longest winning streak since 2004 and reclaiming the ground it lost since the President escalated his trade war in early April.
The rally was motivated by a better-than-expected monthly jobs report and new hopes for a calming down in the U.S. trade showdown with China.
The gains were widespread as about 90% of stocks and every sector in the S&P advanced. Technology stocks were among the companies doing the heaviest lifting with Dow components MSFT and NVDA doing well, but unfortunately Dow component AAPL fell by 3.7% after the iPhone maker estimated that tariffs will cost it $900 million.
Banks and other financial companies also made solid gains with Dow components JPM, V, AXP and GS all doing well.
Employers added 177,000 jobs in April. That marks a slowdown in hiring from March, but it was solidly better than economists anticipated and more than twice another ridiculous estimate from horribly inaccurate ADP put forth, which caused the market to sink badly on Wednesday morning before it made a tremendous intraday recovery.
However, the latest job figures don’t yet reflect the effects on the economy of the President’s across-the-board tariffs against America’s trading partners. Many of the more severe tariffs that were supposed to go into effect in April were delayed by three months, with the notable exception of tariffs against China.
“We’ve already seen how financial markets will react if the administration moves forward with their initial tariff plan, so unless they take a different tack in July when the 90-day pause expires, we could see market action similar to the first week of April,” one observer noted.
The S&P slumped 9.1% during the first week of April as Trump announced a major escalation of his trade war with more tariffs. The market has now clawed back its losses since then, helped by a string of resilient earnings reports from U.S. companies, hopes for de-escalation of trade tensions with China and expectations that the Federal Reserve will still be able to cut rates a few times this year.
The benchmark index is still down 3.3% so far this year, and 7.4% below the record it reached in February.
But Friday was a terrific day with the Dow ahead by 564 to 41,317 led by its financial components plus CAT, CRM for a change, SHW, IBM, 3M and MSFT. The S&P gained 83 up to 5686 based on the leadership of those groups. The Nasdaq advanced by 267 to 17,977 with additional strength from NFLX, PLTR at new highs, plus META, NOE and TSMC.
The Russell 2000 Index of small stocks was the hero with a 45 point advance to 2020 and the VIX got down to 22.68 after failing at the historic resistance level of 60 when the market was on tis low early last month.
The job market is being closely watched for signs of stress amid trade war tensions. Strong employment has helped fuel solid consumer spending and economic growth over the last few years. Economists are now worried about the impact that taxes on imports will have on consumers and businesses, especially about how higher costs will hurt hiring and spending.
The economy is already showing signs of strain, with a decrease of 0.3% annual pace during the first quarter of the year. It was slowed by a surge in imports as businesses tried to get ahead of Trump’s tariffs.
The current round of tariffs and the on-again-off-again nature of Trump’s policy has overshadowed planning for businesses and households. Companies have been cutting and withdrawing financial forecasts because of the uncertainty over how much tariffs will cost them and how much they will squeeze consumers and sap spending.
Hopes remain that Trump will roll back some of his tariffs after negotiating trade deals with other countries. China has been a key target, with tariffs of 145%. Its Commerce Ministry said Beijing is evaluating overtures from the U.S. regarding the tariffs.
Investors had a relatively quiet day of earnings reports following a busy week. XOM rose a bit, recovering from an early slide, after reporting its lowest first-quarter profit in years. Dow component CVX gained after it also reported its smallest first-quarter profit in years.
Falling crude oil prices have weighed on the sector. Crude oil prices in the U.S. are down about 17% for the year. They fell below $60 per barrel this week, which is a level at which many producers can no longer turn a profit.
XYZ slumped 20% after reporting a sharp drop in first-quarter profit that fell short of analysts’ forecasts. The financial technology company behind Cash App cited a pullback in consumer spending on travel and other discretionary items as a key reason for the results.
Treasury yields rose in the bond market. The yield on the 10-year Treasury rose to 4.31% from 4.22% late Thursday.
Earnings continue this week with the following lineup: today – CLX, tonight – PLTR, F; Tuesday – AMD, DUK; Wednesday – Dow component DIS plus UBER; Thursday – AKAM, COIN.
Economic reports will see: Tuesday – March trade deficit; Wednesday – F.O.M.C. fed rate decision, at which they are expected to keep the funds rate unchanged at 4.25% to 4.5%, and let us see the criticism that follows this one; Thursday – weekly jobless claims.
