Markets: Weak Chinese economic data dampened investors’ spirits, sending the indexes into negative territory for the 1st week in May. Defensive sectors ruled, with Consumer Staples and Utilities leading the pack, and small caps lagging. Crude oil futures were down a bit this week, continuing the ongoing market/crude oil correlation – crude futures rose Friday, as did the market.
In a continuation of the “Bad News Is Good News” mindset, Friday was an up day, after a weaker than expected US Payrolls Report, which the market felt lessened chances that the Fed will raise rates at its June meeting.
Dividend Stocks Update: These high dividend stocks go ex-dividend this coming week: Nordic American Tankers Limited (NYSE:NAT), TAL International Group Inc (NYSE:TAL), Alliance Holdings GP LP (NASDAQ:AHGP), Corenergy Infras (NYSE:CORR), Fifth Street Finance Corp (NASDAQ:FSC), North European Oil Royalty Trust (NYSE:NRT), PBF Logistics LP (NYSE:PBFX), SandRidge Permian Trust (NYSE:PER), RR Donnelley & Sons Company (NASDAQ:RRD), Statoil ASA (NYSE:STO), Western Refining Logistics LP (NYSE:WNRL), The Carlyle Group LP (NASDAQ:CG), Five Oaks Invst (NYSE:OAKS), SunCoke Energy Partners LP (NYSE:SXCP), UMH Properties Inc (NYSE:UMH).
Volatility: The VIX fell 6.8% this week, finishing at $15.75.
Currency: The dollar rose vs. most major currencies this week.
Market Breadth: 17 of the Dow 30 stocks rose this week, vs. 6 last week. 46% of the S&P 500 rose this week, vs. 38% last week.
US Economic News: The Unemployment Rate held at 5%. The Payrolls report missed expectations, only 160,000 jobs were added in April, vs. the 232,000 6-month average.
Gains occurred in Professional and Business services, Health Care, and Financial activities, while Mining continued to lose jobs.
Week Ahead Highlights: Earnings season continues, with several Consumer Goods stocks reporting, such as Disney (NYSE:DIS), Macy’s (NYSE:M), Kohl’s (NYSE:KSS), Nordstrom (NYSE:JWN), Ralph Lauren (NYSE:RL), Target (NYSE:TGT), and TJX (NYSE:TJX), among others.
Reuters reports that,
“The current 23.1 percent expectation for earnings growth in the discretionary sector compares with bets on a 13.3 percent gain just over a month ago. If the estimate holds, it will be the largest quarterly earnings percentage growth for the sector since the third quarter of 2010.
Coming off of a 12.8 percent increase in year-on-year earnings in the last quarter of 2015, the sector is also expected to post double-digit growth every quarter through the first three months of 2017.”
Sectors and Futures:
Consumer Staples led this week, as Energy trailed.
OJ futures led this week, with gasoline trailing. Crude oil had a down week also:
