April Jobs Report
Stocks are reacting well to the April Jobs report.
Investors and traders are looking at the number of jobs created in April – lower than expected – as a welcome complication to the economy.
The April report showed that 175,000 jobs were created against expectations that ran as high as 250,000 in some corners of the market.
The shortage of jobs brings some relief as the incredible strength in the jobs market continued to suggest that we would see inflationary pressures from the economy.
In this case, a break or slowdown in jobs creation helps the Federal Reserve begin to rationalize lowering interest rates at some point in 2024.
Investors have been clamoring more for lower interest rates than they have a continuation in the strong jobs market.
Hourly wages for April were also lower. Year-over-year wage increases came in at 3.9% versus 4.1% last month.
This, again, is a sign that the Fed may be able to start pinpointing a plan to lower interest rates within the next three months.
It’s all about inflation, not the jobs. Investors are getting what they want with this report, and the market’s initial move of 1% is proof of that sentiment.
Apple’s Earnings Results – Please Proceed with Caution
The results are in… Apple (AAPL) released their quarterly earnings report after the close last night. The actual earnings results weren’t pleasing to investors - it was the bonuses that the company announced that helped the stock move higher.
The report showed that the iPhone manufacturer beat analyst expectations by $0.02, which was the smallest “beat” since the company’s February 2023 results that showed an $0.08 miss of expectations.
Revenue came in as expected, despite a slowdown in iPhone sales, which were down 10%.
Year-over-year revenue was down 4.3% for the quarter, continuing a trend of slowing growth for Apple’s revenue stream. Three of the last four quarters and five of the last six have been negative.
In terms of guidance, Apple’s management is looking for low single-digit revenue growth for the next quarter and margins to remain at the 45.5-46.5% range, which is healthy. The margin outlook made investors happy as it shows that the company is keeping a lid on their costs.
The company blamed much of the underperformance on continued supply chain issues, but several reporting agencies like Reuters and CNBC have been covering the slowdown in demand from China and at the global level.
So, the results weren’t great, but they weren’t bad either. Why is the stock trading higher this morning?
Management pulled the stops with a few bonuses last night.
Apple’s management pulled out the big guns with an approved $110 billion of share buybacks, the most ever for a public company. The company also increased their dividend by 4%.
This was the news that set the stock moving higher in the after hours and into this morning’s trade.
Very little was expressed in terms of the company’s new initiative, which is what was really needed. The stock’s move above its 200-day moving average this morning will be what technical traders are watching.
This trendline is in a bearish pattern and likely to maintain some pressure on Apple’s stock price.
Watch for a continuation of the bearish trend next week on this ho-hum earnings report.
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.