EB Daily Market Report - Wednesday, April 23, 2025
Executive Summary
- Futures were higher overnight and our major indices gapped up at the opening bell
- We've struggled to add to those early gains, but our major indices do all remain green at this time
- The beige book, providing anecdotal evidence of economic conditions in one of the Fed districts, is being released at 2:00pm ET; it'll be interesting to see if that has any impact on the market in the final two hours
- Technology (XLK, +3.77%) and consumer discretionary (XLY, +3.16%) are the two strongest sectors today
- Electronic equipment ($DJUSAI, +5.61%) and semiconductors ($DJUSSC, +5.25%) are performing extremely well at the industry group level
- New home sales came in surprisingly strong for the month of March, beating estimates by roughly 6%
- Cryptocurrencies are strong, though bitcoin ($BTCUSD, +2.71%) is trailing most others; see Sectors/Industries below for more info on bitcoin
- Tesla (TSLA, +7.79%) is surging after its quarterly earnings report, despite missing on EPS and avoiding guidance due to the uncertainties surrounding tariffs, political backlash, etc.
- International Business Machines (IBM, +1.52%), ServiceNow (NOW, +6.48%), Texas Instruments (TXN, +5.05%), and Chipotle Mexican Grill (CMG, +3.59%) are among those companies reporting after the bell
Market Outlook
It will be very difficult for the S&P 500 to strengthen its technical picture, unless we see the technology sector (XLK) do the same:
Late 2024 into the first couple of months of 2025 saw the XLK's relative strength begin to roll over and deteriorate. Currently, we've printed a relative low, but I'd really like to see that hold. If it doesn't, chances are we'll be heading back down on the S&P 500 to test the 4800 area.
Sectors/Industries
Bitcoin ($BTCUSD) has been rising nicely and is considered a "risk on" investment. It still has a double top to negotiate from December and January, but the 3-month downtrend has been broken:
The PPO is now positive, a bullish development, and bitcoin is threatening to break to an all-time relative high vs. the S&P 500.
ChartLists and Trading Strategies
From a trading perspective, profits on individual stocks could be taken as the S&P 500 hit 5470 earlier, less than 1% away from key price resistance at 5521. The QQQ, which tracks the NASDAQ 100 index, also neared recent price highs from April 9th (467.83) and April 14th (465.05). Today's high was 463.38.
Upcoming Earnings
We now have our Upcoming Earnings ChartLists on our website, so be sure to check those out.
Economic Reports
April PMI composite flash - manufacturing: 50.7 (actual) vs. 49.4 (estimate)
April PMI composite flash - services: 51.4 (actual) vs. 52.5 (estimate)
March new home sales: 724,000 (actual) vs. 682,000 (estimate)
Beige book will be released at 2:00pm ET
Happy trading!
Tom