At the time of this writing (2:30 p.m. ET), stocks are mixed (DJI – 37, SPX + 31, COMP + 177, RUT – 7), but above the midpoints of the intraday range, so the bulls appear to be holding their ground to close out what has been a strong week of gains. Additionally, the SPX (5,521) is currently above key resistance at 5,500 (more on this in the "Technical Take" section below), so a close above this level would provide a more bullish technical set-up heading into next week.
Lastly, the Cboe Volatility Index (VIX) is down to the lowest levels (25.11) since April 2nd, which reflects a more stable market sentiment around volatility expectations. Although I'm encouraged by the improvement in the technicals, I have mixed feelings heading into next week. Stocks are on track for a big up week (SPX +4%, COMP +6%), but we still don't have an official trade deal, and we don't know whether the U.S. is actually having discussions with China.
I feel that expectations are high that we get some sort of U.S./China tariff de-escalation next week, so does that set us up for near-term profit taking if we don't? Outside trade, we've got several mega-cap tech earnings (MSFT, META, AAPL, AMZN) and the monthly jobs report next week, so several volatility-inducing catalysts are on deck. If we don't get any negative headlines on trade, I would have a full bullish bias heading into next week, but that's impossible to predict.
If we don't get any trade headlines that would probably be net bullish for stocks, but I still think the potential for some relatively large up or down days remains. Therefore, my primary forecast for next week is "Volatile" with a secondary forecast of "Slightly Bullish." I'm only going with a slightly bullish outlook because we're near-term overbought on a technical basis (especially in tech) and expectations around trade appear elevated in my opinion.
What could challenge my outlook? Obviously if the U.S. gets a trade deal with any country, or the U.S. and China unilaterally drop their tariffs, stocks could have another big week of gains. Other Potential Market-Moving Catalysts: Economic: – Monday (Apr.
28): no reports – Tuesday (Apr. 29): Advanced International Trade in Goods, Advanced Retail Inventories, Advanced Wholesale Inventories, Consumer Confidence, FHFA Housing Price Index, S&P Case-Shiller Home Price Index – Wednesday (Apr. 30): ADP Employment Change, Chicago PMI, EIA Crude Oil Inventories, Employment Cost Index, GDP Deflator, MBA Mortgage Applications Index, PCE Prices, Pending Home Sales, Personal Income, Personal Spending – Thursday (May 1): Construction Spending, Continuing Claims, EIA Natural Gas Inventories, Initial Jobless Claims, ISM Manufacturing Index – Friday (May 2): Nonfarm Payrolls, Unemployment Rate, Average Hourly Earnings, Average Workweek, Factory Orders Earnings: – Monday (Apr.
28): Roper Technologies Inc. (ROP), Domino's Pizza Inc. (DPZ), Welltower Inc. (WELL), Waste Management Inc. (WM), Cadence Design Systems Inc. (CDNS), NXP Semiconductors NV (NXPI), Nucor Corp. (NUE) – Tuesday (Apr. 29): Coca-Cola Co. (KO), AstraZeneca PLC (AZN), S&P Global Inc. (SPGI), Pfizer Inc. (PFE), Honeywell International Inc. (HON), Visa Inc. (V), Booking Holdings Inc. (BKNG), Starbucks (SBUX), Mondelez International Inc. (MDLZ), Novartis AG (NVS) – Wednesday (Apr. 30): Caterpillar Inc. (CAT), Automatic Data Processing Inc. (ADP), Yum!
Brands (YUM), Microsoft Corp. (MSFT), Meta Platforms (META), Qualcomm Inc. (QCOM), KLA Corp. (KLAC), Equinix Inc. (EQIX), Aflac Inc. (AFL) – Thursday (May 1): Eli Lilly & Co. (LLY), MasterCard Inc. (MA), McDonald's Corp. (MCD), CVS Health Corp. (CVS), Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Amgen Inc. (AMGN), Strategy Inc. (MSTR), Airbnb Inc. (ABNB) – Friday (May 2): Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), The Cigna Group (CI), Cboe Global Markets (CBOE), Eaton Corporation PLC (ETN)
