Last week, the stock market experienced mixed performance as economic data, including the monthly jobs report, kept traders on edge. Early data such as the ISM Manufacturing report came in weaker than expected, leading to hopes of a rate cut. Yields moved lower for the first four days of the week but rallied sharply on Friday after the release of the monthly jobs report, which showed 272,000 new jobs instead of the expected 190,000. This led to a drop in stock index futures and a rise in yields, with chances of a rate cut in September falling from 70% to 55% after the report.
Despite a lower close on Friday, the Nasdaq 100 was up an impressive 2.5% last week, reaching a new all-time high. The index remains the leader year-to-date, up 12.93%, with the S&P 500 not far behind, gaining 12.1% after a 1.3% increase last week. The Dow Jones Industrial Average was the only market to see gains last week, while the Dow Jones Utility Average was the weakest, down 2.8%, followed by a 2.2% decline in the iShares Russell 2000. The SPDR Gold Shares were up earlier in the week but reversed on Friday, dropping 3.6% on the day.
The Invesco QQQ Trust (QQQ) saw a high of $465.74 and closed at $462.96, forming a doji on Friday. QQQ closed 2.1% above the rising 20-day EMA, with support at the May 31st low of $443.05. The Nasdaq 100 Advance/Decline line was forming lower highs as QQQ made a new high last week, creating a negative divergence. The T&J’s Theme WatchList showed that 75% of the Nasdaq 100 largest stocks closed the week above their QPIvots, with some negative signals to watch in the week ahead.
Small-cap ETFs like the iShares Russell 2000 (IWM) caught the market’s attention in early May but weakened as the month progressed, breaking the uptrend. The Russell 2000 A/D line has been below its WMA since May 22nd, dropping sharply at the end of the week. The RS has dropped to a new low for the year, indicating weakness compared to the SPY. The 10-year T-Note yield dropped below the daily starc- band for three days before rebounding on Friday after a stronger-than-expected jobs report. The CPI report, FOMC announcement, and other economic data this week will be important to watch for market trends, especially as the Nasdaq 100 A/D line diverges.
