Stocks Rallied After April's Jobs Report

Adam Sarhan  |

Last week was a bullish week on Wall Street as investors sent stocks higher after the "data" pretty much took a June rate hike off the table. The Fed believes that the economic weakness was 'transitory' in Q1 2015 which is their way of saying they believe the economy will improve in the second half of the year. April's jobs report was slightly higher than expected which helped support that thesis. History shows us that some of the market's strongest performers occur from big gaps up on earnings and some of the weakest stocks continue falling after gapping down after reporting numbers. That is why we want to separate the strong names from the weak names each earnings season. So far, the big winners from earnings season include: Amazon.com (AMZN), Netflix (NFLX), Hasbro (HAS), Domino’s Pizza (DPZ), Skechers (SKX), Dunkin (Donuts) Brands Group (DNKN), Microsoft Corp (MSFT), O’Reilly Automotive (ORLY), and YUM Brands (YUM), Skywest (SKYW), Web.com (WWWW), Equinix (EQIX), Styngenta (SYT), Nutri System (NTRI), Brink's Co (BCO), Teradyne Inc (TER), Skyworks Solutions (SWKS), GoPro (GPRO), Estee Lauder (EL), Abiomed Inc (ABMD), Golar LNG ($GLNR), Energizer Holdings (ENR), RetailMeNot, Inc (SALE), Herbalife (HLF), BlueBird Bio (BLUE), HubSpot Inc ($HUBS), Alibaba Group (BABA), Qorvo Inc ($QRVO)Visteon Copr (VC), Norwegian Cruise Line Holdings (NCLH),  Activision Blizzard Inc (ATVI), Stamps.com (STMP), Imperva Inc (IMPV), Tableau Systems (DATA), AOL Inc (AOL), Universal Display Corp (OLED), and CyberArk Software (CYBR).

On the downside: Monster Beverage Corp (MNST), Cerner Corp (CERN), Sprouts Farmers Market (SFM), Priceline.com (PCLN), Whole Foods Market (WFM), Keurig Green Mountain (GMCR), Kate Spade ($KATE), Lannett Co (LCI), Nu Skin (NUS), Terra Nitrogen (TNH), Tumi Holdings (TUMI), Noodles & Company (NDLS), Qualys  (QLYS), Groupon Inc (GRPN), News Corporation (NWSA), Vitamin Shoppe Inc, (VSI), Fossil Inc (FOSL), Frontier Communication (FTR), TriNet Group ($TNET), Zulily Inc (ZU), Weight Watchers (WTW), Walter Energy Inc. (WLT), Skullcandy (SKUL) Twitter (TWTR), Yelp (YELP), LinkedIn (LNKD), Constant Contact (CTCT), Accuray (ARAY), Cooper Tire & Rubber (CTB), Abaxis (ABAX), Texas Instruments (TXN), Buffalo Wild Wings (BWLD), Baidu Inc. (BIDU), Stratasys (SSYS), Harman (HAR), Nokia (NOK), Travelers (TRV), 3M (MMM), Chipotle (CMG), Pulte Group ($PHM), Biogen Inc (BIIB), Generac Holdings (GNRC), First Solar (FSLR), and American Express (AXP), just to name a few. 

Monday-Wednesday's Action: Stocks Start Off Weak But Close Week Higher

U.S. stocks opened higher on Monday as investors continued to digest the latest round of economic and earnings data. Overseas, Japan's Nikkei and UK's FTSE stock markets were closed for holidays. Economic data was light - U.S. factory orders rose by 2.1% in March, matching estimates. Stocks fell on Tuesday after the latest round of economic data suggested Q1 GDP might actually have been negative. The first reading of Q1 GDP was up 0.2% but the report is subject to a few more revisions before the final number is released. The US dollar fell hard on Tuesdayand Crude Oil topped $60/barrel, hitting a fresh high for the year after The U.S. trade deficit came in at $51.4 billion, topping estimates and was the largest reading since 2008 as imports surged. Imports surged largely because the US dollar has increased sharply in recent months. A separate report showed that April's non-manufacturing ISM jumped to a five-month high, coming in at 57.8, beating estimates for 56.3 and March's reading of 56.5. Overseas, the drama involving the Grexit (Greece exiting the Eurozone) spiked after the Financial Times reported that the International Monetary Fund may cut a funding lifeline to Greece unless its European partners accept more debt writedowns. Finally, the Australian Central Bank cut interest rates for the second time this year to help spur their economy.

Stocks fell hard on Wednesday after Janet Yellen said, "equity valuations are generally quite high." Later in the day,  Atlanta Federal Reserve bank president Dennis Lockhart said he expects economic growth to pick up but needs more evidence, particularly from consumer spending. Before the open, ADP, the country's largest private payrolls company, said private employers added 169k new jobs in April, missing estimates for a gain of 205k. A separate report showed that u nit labor costs for the first quarter jumped by 5% but productivity fell -1.9%, slightly higher than the Street's estimate for -1.8%.

Thursday-Friday’s Action: April Jobs Report Hits The Mark 

Stocks rallied on Thursday after bonds snapped a long losing streak and rallied as rates fell after a big rally. The US dollar rallied as well which sent Crude oil, gold and other commodities lower. Economic data was relatively quiet as investors waited for Friday's jobs report. Weekly jobless claims rose by 3k to a seasonally adjusted 265k, which hovered near a 15-year low. Stocks soared on Friday after the government said U.S. employers added 223k new jobs in April, beating estimates for a 220k while the unemployment rate slid to 5.4% (the lowest since before the financial crisis). This report was in-line with the Fed's view and investors sent stocks higher after the number was released.

Market Outlook: The Central Bank Put Is Alive And Well

Remember, in bull markets surprises happen to the upside. This has been our primary thesis since the end of 2012. We would be remiss not to note that this very strong bull market is aging (celebrated its 6th anniversary in March 2015) and the last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007). To be clear, the central bank put is very strong and until material damage occurs, the stock market deserves the longer-term bullish benefit of the doubt. As always, keep your losses small and never argue with the tape. If you want exact entry and exit points in leading stocks, get a professional watchlist with annotated charts, and always know the strongest stocks of the year, consider joining FindLeadingStocks.com.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
HUBS HubSpot Inc. 180.12 -1.91 -1.05 439,037 Trade
NUS Nu Skin Enterprises Inc. 40.99 1.65 4.19 1,083,718 Trade
MMM 3M Company 172.61 -0.45 -0.26 2,360,194 Trade
CMG Chipotle Mexican Grill Inc. 746.52 -17.52 -2.29 540,051 Trade
BABA Alibaba Group Holding Limited American Depositary Shares each representing one 172.99 0.19 0.11 13,641,139 Trade
FTR Frontier Communications Corporation 1.31 -0.08 -5.76 2,306,846 Trade
EQIX Equinix Inc. 506.61 -5.56 -1.09 305,069 Trade
GPRO GoPro Inc. 5.03 -0.02 -0.40 3,512,266 Trade
BIDU Baidu Inc. 112.25 0.46 0.41 3,294,960 Trade
YELP Yelp Inc. 34.08 -0.38 -1.10 1,015,037 Trade
CTCT Constant Contact Inc n/a n/a n/a 0 Trade
FOSL Fossil Group Inc. 10.61 0.05 0.47 591,072 Trade
HLF Herbalife Nutrition Ltd. 40.97 -1.03 -2.45 2,148,351 Trade
TRV The Travelers Companies Inc. 150.23 -2.48 -1.62 1,374,307 Trade
TUMI Tumi Holdings Inc. n/a n/a n/a 0 Trade
EL Estee Lauder Companies Inc. (The) 190.83 0.59 0.31 1,241,040 Trade
DPZ Domino's Pizza Inc 257.93 5.25 2.08 1,677,212 Trade
SSYS Stratasys Ltd. 28.45 -0.61 -2.10 682,967 Trade
BLUE bluebird bio Inc. 138.12 -3.13 -2.22 466,018 Trade
ORLY O'Reilly Automotive Inc. 396.82 -6.37 -1.58 586,579 Trade
PCLN BKNG Calfrac Well Services Ltd. n/a n/a n/a n/a
AXP American Express Company 124.82 -3.58 -2.79 7,812,624 Trade
DATA Tableau Software Inc. Class A 172.59 -1.23 -0.71 771,813 Trade
QRVO Qorvo Inc. 71.29 0.05 0.07 1,030,523 Trade
TNET TriNet Group Inc. 71.72 -0.57 -0.79 141,006 Trade
TWTR Twitter Inc. 36.77 -0.89 -2.36 10,816,360 Trade
TXN Texas Instruments Incorporated 117.26 -1.31 -1.10 5,596,090 Trade
NDLS Noodles & Company 7.70 -0.06 -0.77 222,519 Trade
CERN Cerner Corporation 72.83 -1.17 -1.58 2,228,939 Trade
MNST Monster Beverage Corporation 63.26 -1.71 -2.63 3,869,904 Trade
LCI Lannett Co Inc 5.98 0.36 6.41 1,025,268 Trade
SKX Skechers U.S.A. Inc. 39.01 4.17 11.97 15,670,913 Trade
ABMD ABIOMED Inc. 260.47 -2.30 -0.88 255,188 Trade
GMCR Keurig Green Mountain Inc n/a n/a n/a 0 Trade
NWSA News Corporation 13.14 -0.14 -1.05 4,465,973 Trade
DNKN Dunkin' Brands Group Inc. 80.10 -0.37 -0.46 366,140 Trade
YUM Yum! Brands Inc. 112.53 -0.53 -0.47 1,387,696 Trade
STMP Stamps.com Inc. 45.30 0.36 0.80 394,770 Trade
LNKD LinkedIn Corporation Class A n/a n/a n/a 0 Trade
NOK Nokia Corporation Sponsored American Depositary Shares 5.14 0.00 0.00 28,211,750 Trade
CTB Cooper Tire & Rubber Company 30.55 0.05 0.16 315,631 Trade
VSI Vitamin Shoppe Inc 4.34 0.24 5.85 661,026 Trade
ATVI Activision Blizzard Inc 45.14 -0.58 -1.27 5,514,510 Trade
SKYW SkyWest Inc. 59.57 -1.14 -1.88 177,466 Trade
NCLH Norwegian Cruise Line Holdings Ltd. 48.60 -0.68 -1.38 1,509,120 Trade
SFM Sprouts Farmers Market Inc. 18.17 -0.08 -0.44 1,032,540 Trade
SKUL Skullcandy Inc. n/a n/a n/a 0 Trade
FSLR First Solar Inc. 66.53 0.57 0.86 878,329 Trade
OLED Universal Display Corporation 205.92 -0.72 -0.35 435,487 Trade
BIIB Biogen Inc. 231.27 -0.96 -0.41 1,315,667 Trade
PHM PulteGroup Inc. 33.23 -0.21 -0.63 2,959,032 Trade
ARAY Accuray Incorporated 3.98 0.18 4.74 849,200 Trade
NFLX Netflix Inc. 315.10 -10.11 -3.11 16,262,026 Trade
SWKS Skyworks Solutions Inc. 81.32 -0.10 -0.12 1,816,928 Trade
CYBR CyberArk Software Ltd. 139.46 -0.25 -0.18 560,085 Trade
GRPN Groupon Inc. 3.38 -0.03 -0.88 3,543,595 Trade
GNRC Generac Holdlings Inc. 71.11 0.23 0.32 555,375 Trade
ENR Energizer Holdings Inc. 39.47 -0.77 -1.91 850,614 Trade
HAS Hasbro Inc. 107.66 -1.72 -1.57 1,047,716 Trade
QLYS Qualys Inc. 87.80 -0.41 -0.46 365,864 Trade
HAR Harman International Industries Incorporated n/a n/a n/a 0 Trade
MSFT Microsoft Corporation 136.62 0.20 0.15 48,950,781 Trade
WWWW Web.com Group Inc. n/a n/a n/a 0
AMZN Amazon.com Inc. 1,964.52 -13.38 -0.68 3,178,826 Trade

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