Dow Jones, S&P 500, and Nasdaq remain in a bull market ahead of the Nonfarm Payrolls report

Wall Street’s three main indexes remained under pressure on Friday even though mega-cap companies mainly posted strong earnings in the first quarter. The Dow Jones and the Nasdaq weakened on a weekly basis while the S&P 500 was about flat.

Amazon, Apple, Alphabet, and other tech-related companies posted better than expected first-quarter results, but their shares have weakened.

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“There is a sense that maybe next quarter is as good as it’s going to get, and we’re going to roll over, particularly among the Nasdaq stocks and Big Tech stocks that benefited from the pandemic,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Palm Beach, Florida.

The U.S. reported the first estimate of Gross Domestic Product for the first quarter, and according to this estimate, the economy grew by 6.4% vs. the 6.1% expected. The Fed chief Jerome Powell said once again that the country still has more than eight million jobs to recover to return to pre-pandemic levels.

Even though the U.S. economy continues to recover from the pandemic, the stimulus program would remain in place. The U.S. CB Consumer Confidence Index largely surpassed the market’s expectations and jumped to 121.7 in April from 109 in March.

The labor market also shows signs of recovery; the weekly unemployment claims came in at 553K, which is near the lowest level since the pandemic began. The U.S. policymakers said they expect a rise in inflation, while Stifel Chief Economist Lindsey Piegza said that the FED could potentially allow the inflation rate to run near 3%.

The U.S. will publish the Nonfarm Payrolls report on Friday, and this will be one of the main events of next week. The U.S. economy is expected to have added 926K new jobs in April, while the unemployment rate is expected to have shrunk to 5.8% from 6% in March.

S&P 500 almost unchanged on a weekly basis

S&P 500 (SPX) closed the week at 4,181 points, and for now, there is no risk of a positive trend reversal.

If the price falls below 4,000 points, it would be a strong “sell” signal, and we have the open way to 3,900 or even 3,800 points.

DJIA down -0.5% on a weekly basis

The Dow Jones Industrial Average (DJIA) weakened -0.5% for the week and closed at 33,874 points.

The Dow Jones Industrial Average continues to trade near record levels, but if the price falls below 33,000 points, it would be a strong “sell” signal, and the next target could be around 32,000 points.

Nasdaq Composite down -0.25% on a weekly basis

Despite impressive results from Apple, Amazon, Alphabet, and Microsoft, the Nasdaq Composite (COMP) has lost -0.4% on a weekly basis and closed at 13,962 points.

If the price falls below 13,500 points, it would be a strong “sell” signal, and the next target could be 13,000 points.

Summary

Even though mega-cap companies mainly posted strong earnings in the first quarter, the Dow Jones and the Nasdaq weakened on a weekly basis while the S&P 500 was about flat. The U.S. will publish the Nonfarm Payrolls report on Friday, and this will be one of the main events of next week.