U.S. Futures & World Markets

Happy Soul Train Friday! US stocks are trying to end the week on a high note, with equity futures higher on falling Treasury yields and easing oil prices. After a week of juggling earnings and geopolitical headlines, investors now turn their attention to the labor market — the April Jobs Report drops at 8:30 AM ET.

US employment has remained surprisingly resilient. We seem to be in a "low hire, low fire" environment: companies aren't aggressively hiring, but they're not laying people off either. With the labor market still relatively stable, the Fed has every reason to keep sitting on its hands.

At the moment, the market is pricing in equal odds of the next Fed move being either a rate cut or a rate hike. Either way, it seems like a recipe for near-term inaction. While incoming Fed Chair Warsh may want to cut rates, he still needs to convince other Fed governors to join the party. A resilient economy and higher energy prices may keep rates on hold for a while longer.

S&P Futures vs. Fair Value: +34.00  |  10-Year Yield: 4.37%

CORE Headlines

Charts & Data

Bull and bear market perspective. From Charles Schwab via Peter Mallouk: a long-term chart illustrating the historical sequence of bull and bear markets — a useful reminder for long-term investors of just how asymmetric the wins are relative to the losses over time.

The K-shaped economy is worsening. The Kobeissi Letter: "Sentiment among consumers earning less than $50,000 is down to ~82 points, the 2nd-lowest since May 2023 and in-line with the 2020 pandemic low. Sentiment among those earning $50,000–$100,000 is near the lowest since December 2023. Meanwhile, sentiment among consumers earning over $100,000 has risen since February to ~110 points — above the 2023–2024 average." Lower-income households are increasingly squeezed by gas prices up 60% year-to-date to $4.56/gallon, the highest since 2022.

Active manager exposure at highest since January. NAAIM via Daily Chartbook: "Active manager exposure to US equities continues to creep higher, now at its highest since the first week of January." The professionals are chasing the tape.

Retail investors pulling back allocation. AAII via Daily Chartbook: "Since reaching a 4-year high in December, AAII allocation to stocks has now declined for 4 consecutive months." The individual investor is more cautious than the tape suggests.

Overbought doesn't mean sell. @bluekurtic via Daily Chartbook: "Is it time to sell when the S&P 500 gets overbought? 75 years of data says no. Forward returns actually improved as RSI moved higher, all the way up to 80, while drawdowns stayed contained. Above RSI 80 is where risk starts rising — but the S&P has spent just 1.1% of the time there."

Semis up 152% in a year — only happened twice before. Datatrek Research: "Semis are up 152.6% over the last year, a record back to 2001 and 4 standard deviations above the long-run mean. It first doubled in a year on April 7, 2026. Here's what happened after the other two times semis first doubled in a year since 2001." Worth looking at those precedents before chasing.

Tech and Mag 7 still below October relative price highs. Jim Paulsen, Paulsen Perspectives via Daily Chartbook: "S&P 500 Technology Stocks and the Mag 7 Index still trade BELOW their respective relative price highs of last October." Despite the monster run, relative leadership hasn't fully recovered yet.

AI vs. everything else. @lizthomasstrat via Daily Chartbook: "It continues to be a market of AI vs. not AI. 47 stocks in the S&P 500 are currently at or within 2% of a 52-week high. 31 of them are in AI-sensitive industry groups — roughly two-thirds."

The AI ripple effect on non-tech stocks. RenMac via Daily Chartbook: "Fifteen non-tech S&P 500 companies, collectively worth roughly $2.0 trillion in market cap, now move with semis at a daily-return correlation of 0.50 or higher. If the AI cycle ever cools off, the wealth-effect drag on consumption is not confined to the Mag 7."

Expected long-term earnings growth now exceeds the 2000 tech bubble peak. Ed Yardeni via Daily Chartbook: "Expected long-term earnings growth for the S&P 500 rose to 20.2% during the week of May 5 — now exceeds the 18.6% peak of the 2000 tech bubble." That's either the most bullish or most cautionary data point of the year depending on how you look at it.

PEG ratio says the market looks cheap. Yardeni Research via Daily Chartbook: "The PEG ratio — forward P/E divided by LTEG — is down to 1.03. The market looks cheap unless earnings growth expectations for the rest of the Roaring 2020s and early Roaring 2030s get bashed, as they did after the Tech Wreck of 2000."

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This content does not constitute legal, tax, accounting, or other professional expert advice. Everything published is believed to be reliable, but its accuracy or completeness is not assured. Past performance does not indicate future results. The opinions expressed herein are subject to change without notice and are solely those of the author as of the date indicated.