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We’ve just seen what is probably the worst jobs report in the life of anyone reading this. That’s the bad news. The good news? Hopefully, we’ll never see a report like this again! Today’s April Non-Farn Payrolls report is definitely great fodder for headlines heading into the weekend, but it is what it is. Everyone is expecting it, so it shouldn’t surprise anyone. Economists and market watchers will take great pains to dissect the numbers, but keep in mind that there are lots of distortions, and once all the revisions are made in the months ahead, the numbers will likely change a lot.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, a discussion of the move into negative territory for Fed Funds futures, and the latest stats and figures surrounding the COVID-19 outbreak.
It came right down to the wire yesterday, but the Philadelphia Semiconductor Index (SOX) finished up 1%+ for the fourth straight day. Sure, the gain was only 1.01%, but 1% is 1%. Thursday’s gain wasn’t the only ‘modest’ 1% gain of the current streak either. Starting with Monday, this week’s daily gains for the SOX were 1.03%, 1.68%, 1.08%, and 1.01%. That works out to a total four-day gain 4.9%, and while 4.9% is nothing to sneeze at, there has never been a four-day streak of 1% gains for the SOX that resulted in a smaller cumulative gain. Not only that, but the SOX is still below where it closed last Thursday (before Friday’s 5% decline). It’s not too often that a stock or index rallies over 1% for four straight days and still is in the red over the prior five days!
However weak the current streak of 1% gains is for the SOX, it still goes down as the longest such streak since December 2016. Also, if the SOX does manage to rise 1% again today (as it is currently trading in the pre-market, it would be the longest streak of 1% gains in over a decade!
We’ve covered breadth in these emails a lot this week, so we might as well check up on the SOX to see how breadth looks in the semis. Unlike the Nasdaq, which was showing a modest divergence with price since the end of April, breadth for the SOX has actually been slightly stronger than price, and that’s a good thing.