Day Traders Diary

4/30/24

The major averages tumbled into the close to end the month in the red for the first down month of the year as higher-than-expected wage data raised fresh inflation concerns ahead of the Federal Reserve's rate decision on Wednesday. The Dow Jones Industrial Average fell 570 points or 1.49%. The S&P 500 fell 80 points or 1.5% while the Nasdaq dropped 325 points or 2%.

 The S&P 500 will snap a 5-month winning streak, dropping 4.2% for April. The Dow Jones Industrial Average fell 5% for the month while the Nasdaq Composite fell 4.4%.

The Labor Department said Tuesday the employment cost index, a measure of wages and benefits, added 1.2% in the first quarter, above the 1% consensus estimate from economists polled by Dow Jones. Treasury yields jumped following the data, with the 2-year yield topping 5%. No one expects the Fed to do anything with rates tomorrow, but the new data may push out rate cuts into 2025.

Even though it was a down day, there were some diamonds.  Eli Lilly jumped 5% on strong earnings and sales, particularly for their weight loss drug. Management expects $2 billion in sales for their weight loss drug for the full year.

Even with the April setback, the S&P 500 is still up more than 25% from its low last October led by tech and in particular, AI stocks like Nvidia. Nvidia is down  3% for the month. After rallying five straight months.