Michael Reinking, CFA
Sr. Market Strategist

After opening higher yesterday, the S&P 500 retested Wednesday’s low, but rallied throughout the session as Treasuries caught a bid extending the post-Fed rally pushing yields to the low-end of the recent range. Overnight Apple (>+5%) cleared a pretty low bar and announced a bigger than expected increase in its capital return program, which set a positive tone ahead of this morning’s jobs report with S&P futures trading higher by ~20pts, with the stock accounting for slightly more than 75% of that move. This morning’s nonfarm payrolls showed 175k jobs were added to the economy in April below expectations for 240k and down from an upwardly revised 315k in the prior month. The unemployment rate ticked up to 3.9% a tenth higher than estimates while labor participation was unchanged at 62.7%. The average hourly workweek was a tenth below estimates at 0.2% m/m and 3.9% y/y, while the workweek ticked down to 34.3 from 34.4. This is kind of a goldilocks number in that there is still strong jobs growth, though the household survey not quite as positive at 25k, with wages remaining tame. Yields have moved sharply lower with some re-steepening of the curve as yields are down 8-13bps across the curve. The USD index is also breaking recent lows down ~0.55% to ~104.60 just above its 50d ma (~$104.35) both are helping risk-sentiment pushing equity futures higher. S&P futures have extended the rally by ~40pts currently trading ~1.1% above fair-value which would put cash markets right around Friday’s high and just below its 50d ma (~5,125).