EB Daily Market Report - Friday, February 2, 2024

Dear Member:

A brief update today.

This morning's employment report surprised everyone, with both the number of jobs and higher than expected wages surpassing expectations. This initially resulted in a retreat in futures but now traders seem pleased with the S&P hitting a new record high and with the NASDAQ being powered higher by the surge in META as well as a nice spike in AMZN, both companies posting better than expected earnings after the bell last night.

Even AAPL has risen sharply off of its low of the day in spite of what some considered disappointing earnings. So we've got a trio of large cap tech stocks leading today's charge higher.

What makes today's rally impressive is that government bond yields are higher with the 10 year treasury note up almost 18 basis points. Thus, in spite of the recognition that the Federal Reserve might not be lowering rates as soon as was hoped for, traders are more focused on the fact that the strong jobs report is showing a resilient economy.

Now that the S&P has hit an all time high, what might be next? 5000 looks like a logical target and is well within reach. We do want to see if the move higher holds into the close as a reversal to the downside would likely signal a top is in. But at the moment the bulls don't even want to think that is an option. Still, any move below today's open of 4916 could show that the market needs a rest.

Tom will be back with his Weekly Report on Monday.

At your service,

John Hopkins