Top 5 Things To Watch In The Stock Market This Week

US Stock Futures Edge Higher On Monday Morning

The U.S. stock futures moved higher in pre-market trading on Monday as investors prepare themselves for the first trading day of May. This week will undoubtedly be another week packed with corporate earnings to watch alongside the monthly jobs report from the Labor Department. So far, corporate earnings have been really impressive. But investors should note that such strong earnings will prompt many to assess the inflation risks once again.

Investors are gearing up for another busy earnings week capped off with a widely watched jobs report. Given the positive economic and earnings news, the path of least resistance appears higher,” Jack Ablin, Chief Investment Officer at Cresset Capital 

With an expected strong job report coupled with the strong earnings season thus far, could we expect another strong start of the week? Sure, corporate earnings are off to a flying start. But the positive surprises have yet to generate any sustainable upward momentum for the stock market. From the stock market futures today, it seems like the market is looking at a strong start indeed. As of 6.37 a.m. ET, all the major indexes are trading in the positive territory. The Dow, S&P 500, and Nasdaq futures are rising, 0.64%, 0.52%, 0.28% respectively.

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April Jobs Report

One of the most closely watched reports will be the April jobs report. And the market is expecting a big number. Economists say payrolls in April could easily reach 1 million after 916,000 jobs were added in March. Estimates range from about 700,000 to a forecast of 2.1 million from Jefferies economists. According to data from Bloomberg, economists’ consensus is that non-farm payrolls grew by 978,000 for the month. That would represent the biggest rise since August 2020.

For investors, the April jobs number will likely also serve as another piece of data showing the economy made strides toward achieving the Fed’s target of ‘substantial progress in the economic recovery. The Fed’s mandate is to pursue full employment and a steady pace of inflation, which it has targeted at 2%. However, if the job number comes in especially strongly, the Fed may feel some pressure to taper its bond-buying program or raise short-term inflation estimates. Nevertheless, both of these may not happen anytime soon. 

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Chinese EV Stocks In Focus After Strong Deliveries

Electric vehicle stocks have been red-hot in the stock market. When the automakers from the biggest EV market report their earnings, many are paying close attention to these Chinese EV stocks. Nio (NYSE: NIO) was the first to report strong April deliveries. The company delivered 7,102 vehicles during the month, up 125% from a year ago. Its domestic peers Xpeng Inc. (NYSE: XPEV) and Li Auto Inc. (NASDAQ: LI) also announced strong numbers over the weekend. 

For Xpeng, the company reported April deliveries of 5,147 vehicles, comprising 2,997 P7 sports smart sedans and 2,152 G3 SUVs. The company’s April deliveries increased 285% year-over-year and represented a marginal increase from 5,102 deliveries in March. To keep the strong growth going, Xpeng has also struck a partnership with Chinese automobile dealer Zhongsheng Group. This partnership allows Xpeng to have more funds to expand by creating a new manufacturing facility in Wuhan and new dealership outlets for Xpeng.

On the other hand, Li Auto delivered 5,539 Li ONEs, its sole smart EV model, in April. This represents a 113% year-over-year increase. The company recorded 4,900 deliveries in March. For those who are unfamiliar to the company, it took Li Auto 17 months to reach the milestone of the 50,000th delivery from the first delivery of Li ONE in December 2019. This is quite possibly the fastest record among all new energy vehicle companies.

Ethereum Breaks Past $3,000 

Ethereum broke past $3,000 on Monday to set a new record high in a dazzling rally. The run-up of the world’s no. 2 cryptocurrency came on the back of ongoing interest in Non-Fungible Tokens (NFTs). For starters, NFTs can really be anything digital. But a lot of the current excitement is around utilizing the technology to sell digital art. And the reason why Ethereum is skyrocketing right now is that most NFTs are part of the Ethereum blockchain. 

But another event may have also contributed to the rally in Ethereum. Last week, the European Investment Bank announced that it had issued 100 million euros in two-year notes, using the ethereum blockchain for the first time. As of Monday morning, Ethereum was at an all-time high of $3,200. Just a year ago, it traded for about $210, an increase of over 1400%. Its price has surged more than 25% in the past week. The digital asset now has a market cap of about $370 billion, according to data from CoinMarketCap.com.

Ethereum could see further gains towards $10,000, a roughly threefold increase forecasted by FundStrat, a market research firm. “In crypto accounting terms, this is the same as a company using revenue, less operating costs, and earning profit that is used to buy back stock. This means the network would become profitable like a company once ETH supply reduction from burned fees outpaces inflation,” wrote FundStrat.

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Earnings

Big Tech earnings have continued the strong momentum since bank stocks brought a good start to the first-quarter earnings season. That has calmed many investors’ nerves. But the question here is, can we expect another week of strong earnings?

Among the big names reporting this week, investors will be watching hypergrowth names closely. These include PayPal (NASDAQ: PYPL), Twilio (NYSE: TWLO), Etsy (NASDAQ: ETSY), Square (NYSE: SQ), Cloudflare (NYSE: NET), and Roku (NASDAQ: ROKU). Apart from these tech stocks, some of the big names reporting from the pharmaceutical space are Pfizer (NYSE: PFE), CVS Health (NYSE: CVS), Moderna (NASDAQ: MRNA), and Regeneron Pharmaceuticals (NASDAQ: REGN).

If you are looking for reopening plays, these cyclical stocks are also reporting earnings this week too. They include Booking Holdings (NASDAQ: BKNG), Uber Technologies (NYSE: UBER), Norwegian Cruise Line Holdings (NYSE: NCLH), TripAdvisor (NASDAQ: TRIP), and Expedia (NASDAQ: EXPE). So, whether it is the April jobs report, planning your trading strategies for Chinese EV stocks, allocating some of your investments into Ethereum, or simply following a string of corporate earnings, these will be enough to keep you busy as the week gets underway.

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