New Price Targets for Apple, Amazon After Jobs Report Turns Heads
Investors just received major insight into the stock market and the economy.
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Wow! We have the April jobs report, along with new price targets for Apple APPL and Amazon AMZN. Plus, the S&P 500 is on a roll, going for its ninth consecutive higher close.
Let’s dig in:
April Jobs Report
Friday morning's non-farm payroll report came in stronger than expected. The monthly report showed that 177,000 jobs were created during April, beating expectations by about 35,000.
Less noticed were the downward revisions for February and March. March was revised from the previously reported 228,000 jobs down to 185,000 — a loss of 43,000. The February report was lowered by about 15,000 jobs.
Looking at individual sectors, the April report showed no glaring strengths or weaknesses. The most noticeable recent change has been the shift away from government job creation.
The initial market reaction to the jobs report was positive. Markets also reacted positively to news that China might cancel tariffs on $40 billion worth of U.S. goods.
The S&P 500 jumped 1% at Friday’s open. The widely watched index has climbed back above its 50-day moving average (blue). Resistance lies ahead at the 200-day moving average (red), currently located at 5745.
The Nasdaq 100 has a similar look. Its 200-day moving average (red) lies ahead at 20,175.
Amazon and Apple
Apple and Amazon both reported earnings after Thursday’s closing bell. Apple is the largest stock in the S&P 500 by market capitalization, while Amazon is ranked fourth.
These two companies have a combined market capitalization of over $5 trillion, so their respective trajectories will have a major influence on overall market direction going forward.
Amazon had a decent quarter, soundly beating earnings estimates by 16%. Revenues were also ahead of estimates by a narrow margin.
Amazon is attempting to break out from a small cup-and-handle pattern (shaded yellow). The depth of the cup is about 30 points. Using an old-school measuring technique, this gives us a price target of $220 for Amazon.
Apple was setting up in similar fashion, but the market was less than pleased with the CEO's post-earnings comments.
Apple did manage to beat estimates for earnings and revenue, but CEO Tim Cook said he anticipates $900 million in additional costs for the current quarter due to tariffs.
Apple dropped nearly 5% at Friday’s open, potentially damaging its rounded-bottom setup (shaded yellow). That bullish pattern suggests a price target of $240.
While the jobs data and earnings from Apple and Amazon were all unspectacular, bulls seemed pleased that there was no glaring negatives in these three reports. Barring a late-date reversal, the S&P 500 seems to be on its way to a ninth consecutive winning day.
At the time of publication, Ponsi was long AAPL and AMZN.
