Labor Productivity and Fewer Layoffs Sustain Market Rally

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Commentary Analysis

  • Comments: Signs of improving labor market conditions and economic data indicating increased productivity and declining labor costs offset early morning selling and enabled the Dow and S&P 500 to rally into positive territory. This essentially neutralized Dallas Fed Governor Kaplan’s hawkish statement in support of tapering asset purchases. Typically, a rotation into value indicates the end of a bullish cycle and precedes a bear market or sharp sell-off. Volume continues to remain weak and signs of systemic distribution selling prevails. Be careful out there…
  • Equities:
    • US Markets: Although major equity indexes finished in positive territory, the results open for interpretation were mixed: SP-500 (SPY) is consolidating; the Dow-30 (DIA) made a new high; and the Nasdaq-100 (QQQ) and Russell-2000 (IWM) continue to trend downward.
    • Leading Sectors: Consumer Staples (XLP); Financials (XLF); and Communication (XLC)
    • Lagging Sectors: Healthcare (XLV); Consumer Discretionary (XLY); and Energy (XLE)
    • Int’l Markets: EAFE Index (EFA) recorded another new high while Brazil (EWZ) and Latin America 40 (ILF) followed through on yesterday’s bullish reversals. China (FXI) was today’s only significant laggard as it trends downward and begins to test support @ March-2021 lows.
    • Volatility: VIX (VXX) remains subdued and closing @ 6% of today’s trading range indicates weakness could persist..
  • Large-Cap Volume Surgers:
    • Fastly Inc (FSLY): -27.13% on 629% volume surge
    • Etsy Corp (ETSY): -14.57% on 333% volume surge
    • Uber Technologies (UBER) -8.85% on 322% volume surge
    • Peleton Interactive (PTON) +1.40% on 318% volume surge
    • Kellogg Co (K) +7.07% on 299% volume surge
    • Eqt Corp (EQT): -8.77% on 295% volume surge
  • Small-Cap Volume Surgers:
    • Two Harbors Invt Corp (TWO) -12.61% on 295% volume surge
    • Biocryst Pharma Inc (BCRX): +20.97% on 230% volume surge
    • Hecla Mining (HCLA): +16.64% on 187% volume surge
    • Sunrun Inc (RUN): +11.69% on 145% volume surge
    • Bloom Energy Corp (BE): +2.82% on 64% volume surge
  • Market Moving Events:
    • Earnings / Positive Surprises: Kellogg (K); and Iron Mountain (IRM); exceeded estimates.
    • Earnings / Negative Surprises: Cardinal Health (CAH); and FLIR Systems (FLIR) failed to meet estimates.
    • Labor / Unemployment Claims: @ 498k vs estimates @ 540k and prior @ 590k.
    • Labor / Unit Labor Costs (q/q) (Q1-2021): @ -0.3% vs estimates @ -0.8% and prior @ 5.6%.
    • Labor / Nonfarm Productivity (q/q) (Q1-2021): @ 5.4% vs estimates @ 4.3% and prior @ -3.8%.
  • Bond Rates: The 10-Year Treasury yield closed @ 1.56 (-0.02bps / -1.27%).
  • Currencies: US Dollar (UUP) weakness on lower rates is encouraging rotation into the Euro (FXE) advances. Yen (FXY).
  • Cryptocurrencies: After last week’s strong advance, Grayscale Bitcoin (GBTC) Ethereum (ETHE) are both consolidating while money flows into smaller Alt-Coins, e.g. Litecoin (LTCN).
  • Commodities: The correction in the US Dollar is another positive for Gold (GLD) which broke out to a new 12-week hight today.
  • Real Estate: Real Estate Index (IYR) and Residential (REZ) are encountering resistance and currently consolidating. Homebuilders (ITB) uptrend remains intact but could also soon encounter resistance.

ETF Daily Market Performance Summary: 6-May-2021

etf daily market summary for stocks, bonds, currencies, cryptocurrencies, commodities, real estate, and equity sectors
Click to enlarge

Market Diary: 6-May-2021

market diary summary for NYSE and Nasdaq exchanges: advancers, decliners, new highs and new lows, plus mega-cap market breadth
(Click table to enlarge)

Covid19 Global Status Update: Top 5 New Cases in Last 7 Days

The infection rate for India still continues to hit new highs. On a positive note, this growth is starting to decelerate. Globally, the number of cases within a 7-day timeframe is beginning to contract as countries like Brazil, Turkey and Argentina improve.

RankCountryCases last 7 daysCases previous 7 daysWeekly % Chg
World5,556, 5465,810,311-4%
1India2,730,3012,497,675+9%
2Brazil416,137420, 747-1%
3USA324,702383,702-16%
4Turkey189,282+287,318-3%
5Argentina140,639158,175-11%

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