Wall Street opened higher, ignoring the missing GDP
While market participants were worried about a big miss in the first quarter of US GDP, strong earnings by Meta and recovering tech stock price covered up concerns about economic growth.
After its earnings report, today's market driver was the Facebook (NASDAQ: FB) share with an almost 18% gain. At the same time, Apple and Amazon, ahead of their earnings after market close, gained more than 4%.
For now, market participants are happy with the earnings report and 80% win rate of SP500 members. However, we should not forget that we will have the FED meeting next week. If FED -as market participants expect it- hikes rates very aggressively, with ongoing geopolitical tensions market will get a shock from recession worry.
On the earnings front, Meta Platforms (FB), Qualcomm (QCOM), PayPal Holdings Inc (PYPL), Mastercard (MA), and Eli Lilly (LLY) all reported well above the market expectations after market close yesterday and today before the market opens. According to the published EPS numbers, 81% of results beat Wall Street expectations. The average win rate is 66% beat estimates, according to Refinitiv data. So far, we have had reports of 237 companies listed in the S&P 500.
On the economic data front, Initial Jobless Claims reduced by 5K to 180K, as was expected. Continuing claims also eased, but just 1K to 1,408K, but the improvement was less than 6K estimates. In addition, today US Commerce Department reports Q1 GDP numbers. According to the published numbers, GDP fell at a 1.4% annualized rate last quarter, after clocking 6.9% growth in the fourth quarter, which also missed the 1.1% expected growth rate.
After all mentioned changes and news, and while Wall Street is ignoring the data and concerns, Dow Jones Industrial Average is up 1.8%; the S&P 500 is gaining 2.50 and the Nasdaq Composite, thanks to the more significant increase in tech giants, increasing 3.5% so far, and at the time of writing.
From the technical point of view, although today's sharp gain, Nasdaq is still in an overall downtrend in the Daily chart with prices under main MA lines and RSI at 42, and falling OBV trend line. 14,000 is the pivot point, and 15,200 is the first resistance. Any uptrend in the Nasdaq chart will be confirmed only by passing above the first resistance.
