EB Daily Market Report - Brief Update - Wednesday, April 30, 2025
Well, another shoe dropped this morning as Q1 GDP turned negative. Consensus estimates were anticipating a big drop to 0.2%, but we were at least expecting a positive GDP. That actual number came in at -0.3%. That was second leg of the daily double, however, because 15 minutes earlier, the ADP employment report reported jobs 50% lower than anticipated, 62,000 vs. 125,000. Futures dove and it appeared as though renewed selling and rapidly-escalating fear were about to take over after a very nice advance the past couple weeks.
Once again, morning weakness was met with very aggressive buying and the escalating fear didn't last long. The QQQ reached a morning low of 462.43 and the latest price, just minutes ago, was 471.92. The intraday rebound sent the QQQ to 473.93 at its intraday high. For me, this is nothing more than what we've been talking about since the March 13th low, and especially during and since the capitulatory low in the first week of April.
Don't expect the sudden ups and downs to end any time soon, though. After the bell today, Microsoft (MSFT, -1.04%) and Meta Platforms (META, -2.51%) will report their latest quarterly results. Others reporting include QCOM, KLAC, and HOOD. MSFT and META, in particular, can sway our major indices due to their market cap weighting.
After the bell on Thursday, we'll get the latest results from two more Mag 7 stocks, Apple (AAPL) and Amazon.com (AMZN). Other key companies reporting tomorrow after the bell include AMGN, MSTR, ABNB, TEAM, and RDDT.
Expect fireworks. Remember, opening gap downs followed by intraday buying is bullish, in my view. I'd worry more if we see heavy volume selling in the afternoon.
And all of this doesn't even include Friday morning's nonfarm payrolls report. The expectation for jobs is 130,000. Could we follow the negative economic news out this morning and possibly see a negative jobs number? If so, I can only imagine the negativity in the media to follow. I'd love to tell you how all of this will play out short-term, but I honestly have no clue. I put my faith in my signals and they suggest that Wall Street is happily buying during just about every early morning price dip.
The good news today is that each of our major indices - Dow Jones, S&P 500, NASDAQ 100, and Russell 2000 - successfully tested their now-rising 20-day EMAs. If these indices lose 20-day EMA support and we see very weak afternoon finishes, then we could be looking at further weakness and a possible retest of early-April lows. I don't believe it happens and I won't worry about it as long as our major indices are trading above key moving averages and showing rising AD lines.
Happy trading!
Tom