Rotation Narration

The Bureau of Economic Analysis reported on Friday that the Personal Consumption Expenditures Price Index or PCE for April, excluding food and energy, referred to as the core PCE price index +.7% or +3.1% from April 2020 during the Covid shutdown. This compares to the core CPI at +.9% reported two weeks ago. Unlike the CPI report, this time the markets yawned and quickly relegated it to the "nothing to see here" file as the S&P 500 Index continued trading in a narrow range and the yield on the 10-Year Treasury Note declined 3 basis points ending at 1.58%. The Market Review concludes lower interest rates will help rotation back into growth sectors at least until the release of the employment report on Friday. Next, some additional information about last week's Plug Power, Inc. idea follows.

S&P 500 Index (SPX) 4204.11 up 48.25 points or +1.16% on the unusual combined volume of 3.3 bn shares on Thursday compared to recent average of around 2 bn shares. After the second successful test of the 50-day Moving Average on Wednesday, May 19 before reversing to close the day higher. Upward momentum will likely continue until it retests the previous intraday high of 4238.04 reached on May 7. Just in case a better than expected employment report on Friday shocks the market, support at the 50-day Moving Average closed the week at 4115.23.

Invesco QQQ Trust (QQQ333.93 advanced 6.92 points or +2.12% last week after jumping up and closing well above resistance at the 50-day Moving Average on  Monday as the yield on the 10-Year Treasury Note declined 2 basis points to 1.61% followed by another 5 basis point decline on Tuesday to close at 1.56%. News that China intends to crackdown on rising prices of industrial materials declaring zero tolerance for commodity market violations thereby implying a need to control commodity price speculation played a role. Friday the yield on the 10-Year Treasury Note ended at 1.58%, down 3 basis points for the week.

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Disclaimer: IVolatility.com is not a registered investment adviser and does not offer personalized advice specific to the needs and risk profiles of its readers.Nothing contained in this letter ...

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