May 1, 2023

Markets:

U.S. stock futures hovered around the flatline Monday, the first day of the month, as traders assessed the takeover of failed bank First Republic.

First Republic Bank, JPMorgan Chase — First Republic shares were halted during premarket trading after falling more than 45%. The move comes after JPMorgan took control of First Republic after the beleaguered bank was taken over by regulators. JPMorgan Chase added 3.6% in the premarket. SPDR S&P Regional Banking ETF — The regional banking fund fell 0.4% in premarket trading as investors reacted to the failure of First Republic. That bank had a weighting of less than 0.15% in the fund as of Friday. Among other regional banks, PacWest was one of the biggest decliners, falling more than 5%.

Stocks are coming off a winning week and month. For April, the Dow gained 2.5% to notch its best monthly stretch since January, while the benchmark index gained 1.5%. The tech-heavy index posted marginal gains. Earnings reports from major tech companies dominated much of last week’s market debate, fueling the narrative that earnings are faring better-than-feared, despite many widespread macroeconomic concerns.

Monday kicks off another busy week for earnings, with results from Norwegian Cruise Line and MGM Resorts. Reports from Pfizer, Starbucks, Advanced Micro Devices and CVS Health are due out later in the week.

Wall Street also awaits ISM manufacturing data, construction spending and S&P Global manufacturing PMI on Monday. April’s nonfarm payrolls report is on deck Friday.

Portfolio:

We enter the new trading week and month holding set-ups in SAGE, EDR, and ARRY.  Monster month for us in April and beyond excite to potentially retest 4200 on the s&p this week.  Remember the game plan; we break and hold 4200 then 4350 is next in play.  We dare break 4350 to the upside and the hated rally of 2023 is on!  3890 to the downside is where bears can retake control.  Else, 3890 – 4200 remains in range. One way or another, we would love to see a break a next level trading opportunity igniting.  This week we have Powell, AAPL earnings, and much more that can set market trends.  So we remain cautious but ready to fire away as queue continues to light up.  Be ready and lets have another great month!