That was a heck of a comeback. Yesterday morning, I wrote that the reaction to the Gross Domestic Product (GDP) report was excessive, but I wasn’t surprised. In this week’s Payne’s Perspective, I mentioned the Bears would take their shot as desperation grows. But the pendulum is shifting as upside bias returns. Before this week's over, you are going to read a million articles and quotes on Bear market rallies. I don’t know what this is, but I’m sure it's good stuff. When the coast is clear, this market will soar, and the irony is that the so-called smart money crowd will lift it into the next stage of orbit. 

The late move and volume spikes are “buy” signals.

Quality Leads the Charge

It was a broad-based rally, but most factors were unchanged or lower on the day, save for low volatility and quality.

Defensive Posture

There was a more defensive tone, with Health Care (XLV), Consumer Staples (XLP), and Real Estate (XLRE) among the best-performing sectors.

Growth sectors and Utilities (XLU) struggled during the session, reflecting anxiety ahead of major earnings releases after the close.

Powering the AI Race

Data Centers paced the first quarter record surge in Technology (XLK) spending. The story isn’t old; it’s just getting started.

Big Tech Steps Up

Meta (META) crushed Wall Street’s consensus with its earnings report after the close. The company's daily active users climbed 6.1% to 3.4 billion. Management hiked the capex budget to between $64 and $72 billion. Mark Zuckerberg said, “Don’t call it a one-off; call it an acceleration.”

Not to be outdone, Microsoft (MSFT) also hiked its capex spending to $64 to $72 billion. Shares of both companies got a nice lift.

Today’s Session

There’s an old saying on Wall Street to “sell in May and go away.”  Historically, gains are greater from November to April, but in the last ten years the market has been higher from May through October.

Stay the course.

Meanwhile the coast isn’t clear until the S&P 500 closes above 5,800.  But the current move is more than admirable. In the face of an unrelenting campaign to sink the market this resolve speaks volumes.

Comments

With stories about China exports to the USA slowing down significantly, perhaps some folks are realizing that tariffs do not harm households that do not purchase those products. Similar to Investors do not realize an investment "loss" until they make a transaction to sell the investment. Common Sense is calming. P. Krueger on 5/1/2025 11:42:00 AM

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