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. 114.54 -19.30 -14.42 1,166,506 Trade
NUS Nu Skin Enterprises Inc. 65.50 -2.28 -3.36 308,114 Trade
MMM 3M Company 205.58 -3.42 -1.64 3,220,380 Trade
CMG Chipotle Mexican Grill Inc. 465.87 -6.89 -1.46 674,776 Trade
BABA Alibaba Group Holding Limited American Depositary Shares each representing one 149.53 -4.57 -2.97 18,082,816 Trade
FTR Frontier Communications Corporation 3.81 -0.11 -2.81 2,577,430 Trade
EQIX Equinix Inc. 383.47 -5.16 -1.33 438,167 Trade
TER Teradyne Inc. 35.29 -1.12 -3.08 1,761,299 Trade
GPRO GoPro Inc. 5.40 -0.12 -2.17 2,225,017 Trade
BIDU Baidu Inc. 183.09 -3.86 -2.06 2,665,173 Trade
YELP Yelp Inc. 31.27 -1.50 -4.58 2,169,993 Trade
CTCT Constant Contact Inc n/a n/a n/a 0 Trade
FOSL Fossil Group Inc. 19.71 0.77 4.07 1,554,101 Trade
HLF Herbalife Nutrition Ltd. 54.38 -0.64 -1.16 764,748 Trade
NTRI NutriSystem Inc 36.61 -0.53 -1.43 266,514 Trade
TRV The Travelers Companies Inc. 130.52 1.75 1.36 2,118,142 Trade
TUMI Tumi Holdings Inc. n/a n/a n/a 0 Trade
EL Estee Lauder Companies Inc. (The) 142.87 -1.15 -0.80 1,673,085 Trade
DPZ Domino's Pizza Inc 252.07 -12.55 -4.74 791,503 Trade
SSYS Stratasys Ltd. 21.50 -0.90 -4.02 482,736 Trade
BLUE bluebird bio Inc. 119.40 -5.94 -4.74 615,184 Trade
ORLY O'Reilly Automotive Inc. 354.24 1.64 0.47 583,354 Trade
PCLN BKNG Calfrac Well Services Ltd. n/a n/a n/a n/a
AXP American Express Company 108.25 -1.21 -1.11 3,161,103 Trade
DATA Tableau Software Inc. Class A 104.12 -11.92 -10.27 1,759,454 Trade
QRVO Qorvo Inc. 63.15 -3.17 -4.78 1,901,658 Trade
TNET TriNet Group Inc. 44.24 -0.52 -1.16 378,519 Trade
TWTR Twitter Inc. 31.98 -1.69 -5.02 15,735,442 Trade
TXN Texas Instruments Incorporated 94.62 -3.23 -3.30 8,265,241 Trade
NDLS Noodles & Company 9.27 0.08 0.87 343,205 Trade
CERN Cerner Corporation 56.25 -1.64 -2.83 1,756,980 Trade
AMZN Amazon.com Inc. 1,512.29 -81.12 -5.09 7,783,717 Trade
MNST Monster Beverage Corporation 57.04 1.27 2.28 4,079,711 Trade
LCI Lannett Co Inc 6.19 0.22 3.69 4,306,444 Trade
SKX Skechers U.S.A. Inc. 26.27 -1.02 -3.74 2,183,691 Trade
ABMD ABIOMED Inc. 299.83 -19.95 -6.24 966,341 Trade
IMPV Imperva Inc. 56.02 -0.03 -0.05 215,078 Trade
GMCR Keurig Green Mountain Inc n/a n/a n/a 0 Trade
NWSA News Corporation 13.30 -0.27 -1.99 2,801,307 Trade
DNKN Dunkin' Brands Group Inc. 71.26 -1.96 -2.68 964,364 Trade
YUM Yum! Brands Inc. 88.13 -0.76 -0.85 2,565,297 Trade
STMP Stamps.com Inc. 152.91 -0.66 -0.43 454,691 Trade
LNKD LinkedIn Corporation Class A n/a n/a n/a 0 Trade
NOK Nokia Corporation Sponsored American Depositary Shares 5.72 -0.09 -1.55 13,216,003 Trade
CTB Cooper Tire & Rubber Company 33.76 -0.42 -1.23 608,385 Trade
VSI Vitamin Shoppe Inc 7.62 -0.37 -4.63 463,330 Trade
ATVI Activision Blizzard Inc 49.14 -1.80 -3.53 13,062,137 Trade
SKYW SkyWest Inc. 53.90 -0.84 -1.53 193,654 Trade
NCLH Norwegian Cruise Line Holdings Ltd. 49.27 -1.16 -2.30 2,324,612 Trade
SFM Sprouts Farmers Market Inc. 27.61 -0.06 -0.22 1,959,435 Trade
SKUL Skullcandy Inc. n/a n/a n/a 0 Trade
FSLR First Solar Inc. 43.94 -0.43 -0.97 1,560,574 Trade
OLED Universal Display Corporation 87.26 -3.27 -3.61 664,456 Trade
BIIB Biogen Inc. 319.21 -4.84 -1.49 1,203,760 Trade
PHM PulteGroup Inc. 25.22 0.25 1.00 8,348,119 Trade
ARAY Accuray Incorporated 4.46 -0.25 -5.31 660,005 Trade
NFLX Netflix Inc. 270.60 -15.61 -5.45 12,988,215 Trade
SWKS Skyworks Solutions Inc. 70.76 -2.19 -3.00 2,516,193 Trade
CYBR CyberArk Software Ltd. 67.54 -7.19 -9.62 981,527 Trade
GRPN Groupon Inc. 2.94 -0.08 -2.65 8,661,228 Trade
GNRC Generac Holdlings Inc. 56.19 -0.61 -1.07 315,036 Trade
ENR Energizer Holdings Inc. 48.29 -1.68 -3.36 1,965,639 Trade
HAS Hasbro Inc. 94.89 -2.82 -2.89 1,274,101 Trade
QLYS Qualys Inc. 69.21 -5.48 -7.34 400,042 Trade
HAR Harman International Industries Incorporated n/a n/a n/a 0 Trade
MSFT Microsoft Corporation 104.62 -3.67 -3.39 44,767,341 Trade
WWWW Web.com Group Inc. n/a n/a n/a 0

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Alliance Growers Corp is a Canada based diversified cannabis company. The company is primarily focused on the development of Cannabis Botany Centres in Canada.