US stocks rise despite weak jobs statistics. Forecast for next week. Despite a hotter NFP reading, S&P 500 and Nasdaq rise.
US Equities Key Points – Likely Trend, Bullish
Amid a hotter NFP reading, US stocks gain. Probably supported by unchanged average hourly wages and an increase in the jobless rate.
With 4325 in view, the S&P 500 concludes its week on a strong note. At present, just 29 businesses surpass the index.
At these elevated levels, the Nasdaq is heading upward with a danger of boiling.
US Stocks Surge, despite the hot NFP data
US stocks have been increasing steadily against all odds, driven by a few technology firms. And, lately, by stocks connected to artificial intelligence. Their inclinations for a bypass at this month’s FOMC meeting. The Fed gave equities markets a significant boost last week. Additionally, any remaining worries that were dragging on the risk markets. Which vanished when a last-minute bipartisan deal to lift the debt limit was struck.
Following that, on Friday, the NFP figures gave us a further indication of how resilient the nation’s employment market is. As May’s job gains of 339k were much above the consensus of analyst’ forecast of 190k. The 253 estimate for April also increased to 294k. A strong job market signals that the Fed’s attempts to control inflation are far from finished. Which raises the possibility that the panel may decide to raise rates once more during the month.
Although the dollar often has a negative influence on indexes after the release of the NFP data. This wasn’t the situation on Friday. However, average hourly wages did not increase and that unemployment actually increased in spite of the job growth. Which could be the point of concern for market players.
The US stocks driven up by Tech based firms
While the rest of the index hasn’t been doing all that well. The overall market value weighted index remains to be driven by movements of large market capitalization tech firms. Which counts the number of businesses beating the index of the S&P 500. With a value of 29, it is currently less than it was in 2008 during the Covid era. And just marginally higher than it was before to the dotcom boom.
Technical analysis of the S&P 500
On Friday, the index of the S&P 500 gapped upward at the start. And then crossed over the rising wedge just before the close. Prior to today’s rise. The price showed resistance to breaking higher levels and had only been able to move up gradually. The RSI is moving into overbought region. Suggesting that there may still be opportunity for the most recent surge to continue.
The market appears to be in better shape after the advance, thanks to the August 2022 top of 4325. Serving as the index’s next point of resistance. Obviously the previous resistance at 4196/4200 serves as support.
TECHNICAL ANALYSIS OF THE NASDAQ
Although it looks to have climbed to a smaller extent than SPX, the Nasdaq graph, like the S&P 500. Produced a respectable move upward to finish the week close to the 14,500 mark. This might be because of its steep surge, which has placed it in overheated zone (RSI). After emerging from an area of stabilization that formed throughout April. And the first few days of May, the index began to trend upwards.
The Nasdaq has now breached far into overbought ranges due to the move’s pitch. The market watchers will be watching for a potential drop should traders opt to cut their position at such high rates. Resistance is seen at 15,260, and this is the same as the peaks from Feb and March 2022. The significant advance from 2020 through 2021’s 23.6% Fib retracement serves as support right away.
