S&P 500: The S&P 500 could break above 4,200, pending Apple's release of its fiscal 2Q 23 earnings result on Thursday
The S&P 500 bounced off its trendline support / 50-day EMA as the index is pricing in the possibility of a 25-basis point hike at the May FOMC meeting, pushing the fed funds rate to 5.00% and 5.25%. The market is hoping that the Fed will pause after that. Last week, the Fed's Mester, a non-voting member of the FOMC, said she sees the policy rate to move above 5% and expects a "soft landing" for the U.S. economy.
The U.S. GDP rose at a 1.1% pace in the first quarter, in line with the forecast from the Fed Atlanta GDPNow model. The spread between the 2Y U.S. Treasury yield and its 600-day EMA is 1.44%, meaning an impending U.S. recession is unlikely. It looks like the Fed's Mester will get what she wanted.
Tech and Communication Services sectors led the market last week. Apple will release its fiscal 2Q 23 earnings result on Thursday. Their consensus earnings estimate is expected to be down 5.3% to $1.44 per share, while revenue could be down 4.1%, to $93.32 billion, per Zacks.