US Market Technicals Ahead (3 May – 7 May 2021)

As markets enter into the month of May, investors will turn to the US jobs report due this Friday, which will probably point to an acceleration in the labor market recovery. Appearances by Federal Reserve officials and other data, including PMIs for indications on the health of the U.S. economy will also be closely watched, as the reopening continues

On the corporate front, the first-quarter earnings season continues, with reports to watch including Pfizer ($PFE), General Motors ($GM), PayPal ($PYPL), Uber ($UBER), and Berkshire Hathaway ($BRK)

Here is what you need to know to start your week.

S&P500 (US Market)

The benchmark index ( $SPX ) squeezed out a gain of, +0.34% (+14.1 points), with price action remaining flat and muted as cautioned previously. The current ATR-14 range of $SPX is trading at its lowest of the year at 40 points/day, an almost 50% shave off from the Year to Date peak of 71 points per day (March 2021).

With $SPX daily price action transiting into a consolidation phase at its high, along with sessional volume well remaining below its 50 days average range for the 4th consecutive week, it is worth to note that the number of US equities trading above its individual 100 Day Moving Average have declined to only 66%.

At such juncture, it is of utmost importance for market participant to remain prudent with their risk exposure on the long side of the market. The immediate support to watch for $SPX remains at 4,110 level, a minor classical support level .

Bumper job gains expected

The U.S. economy is expected to have notched up another strong month of jobs growth in April with Friday’s nonfarm payrolls report expected to show 978,000 jobs created, after 916,000 jobs were added in March – the largest increase since last August. The unemployment rate is expected to tick down to 5.7% from 6%.

Data late last week showed that economic growth accelerated in the first quarter, putting the economy on track for what is expected to be the strongest performance this year in nearly four decades.

Unprecedented fiscal stimulus and easing anxiety over the pandemic, with all adult Americans now eligible for vaccination, have resulted in a faster economic rebound in the U.S. compared to the rest of the world.


Earnings are rebounding from last year’s pandemic-fueled lows, with results now in from more than half of the S&P 500 companies.

Dozens more companies are due to report in the coming week, with vaccine makers Pfizer ($PFE) reporting Tuesday, followed by Moderna ($MRNA) on Thursday.

Travel related earnings to watch include results from Hilton Worldwide Holdings Inc ($HLT) and Caesars Entertainment ($CZR), while some consumer brands are also on the schedule, including Anheuser Busch Inbev ($ABI) and Estee Lauder ($EL).

Some other notable earnings include General Motors ($GM), Uber ($UBER), ViacomCBS ($VIAC), DraftKings Inc ($DKNG) and Beyond Meat ($BYND).

Earnings are raising some fresh questions in the debate over growth versus value. After a decade of steadily under-performing the overall market, value has been a favorite reopening bet and investors will be watching to see if this trend continues.

Fed Chairman speaks

Fed Chairman Jerome Powell is speaking on Monday, but he is not expected to offer any fresh insights on the economy during his appearance to discuss community development at an online conference hosted by the National Community Reinvestment Coalition.

Last week Powell said the “time is not yet” to talk about tapering the Fed’s $120 billion monthly pace of bond buying.