Weekly Update for May 5-9, 2025

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Update for the week of April 28 to May 2, 2025, with a focus on the upcoming week of May 5-9.
Market Overview:
Weekly Performance: The S&P was up 2.92%, NASDAQ up 3.4%, and Dow up 3%, marking nine consecutive up days, a rare occurrence. Volume was above average weekly, though some daily S&P sessions were below average.
Short-Term Outlook: Daily charts show improvement, but markets are hitting resistance levels across indexes (S&P, NASDAQ 100, Dow), suggesting potential profit-taking.
Weekly Outlook: Weekly charts remain more negative, with technical indicators such as the ADX showing a strengthening trend negative, but the red line is declining.
Economic Indicators:
Mixed signals: Core PCE was unchanged (market-positive), but GDP inflation component (deflator) is raising concerns. Employment data was stronger than expected but with downward revisions to prior months.
Bonds are continuing to stabilized, with interest rates rising slightly (10-year yield at 4.32%) due to perceived economic strength from Friday’s employment report.
Consumer confidence dropped to 86, and inflation expectations rose to 7%.
First-quarter GDP was down 0.3%, with a deflator up 3.7%, indicating stagflation concerns.
Earnings Season: 72% of S&P 500 companies reported, with 76% beating lowballed estimates. Profit margins remain above 12%. Notable performances: Microsoft (+11.1%), Meta (+9.1%), Apple (-1.9%), Amazon (+0.5%).
Sector Performance: Tech, industrials, and financials outperformed; defensive sectors (energy, healthcare, staples) underperformed, signaling current market optimism.
Sentiment: Sentiment has improved, the VIX is above 20 but declining, and individual investors remain pessimistic, potentially a contrarian bullish signal.
Recession Concerns: Employment growth at 1.19% is near recessionary levels. Negative GDP for one quarter raises concerns, but positive forecasts for Q2 2025 (1-2.5%) offer hope.
Technical Analysis:
Daily charts show the S&P above the 50-day moving average, but weekly charts are below the 50-week moving average, indicating a longer-term downtrend.
Momentum indicators are mixed, with some showing overbought conditions (McClellan oscillator, bullish percent index).
Resistance at 5,700 (S&P) is a psychological level to watch.
Intermarket Analysis:
Gold is down as stocks rise; bonds and commodities are mixed.
Growth stocks are rebounding vs. value, and tech is outperforming energy recently.
Fed Outlook: The Fed meets May 6-7, with a 97.2% chance of unchanged rates. June 18 meeting has a 65% chance of steady rates, 34% chance of a 25-basis-point cut.
Seasonality: May has been positive recently (100% up over the last four years, average 1.5% return), but longer-term data (1964-2023) shows a 60% chance of gains with a 0.2% average return. The first half of May tends to underperform the second half.

PDF of Charts and Slides used in today's video: https://drive.google.com/file/d/1IdI6d9SL7dIVHxm-z4n34bpm8IHJm3_x/view?usp=sharing

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!