S&P 500 (SPX), Nasdaq (QQQ) Update: PMI pops the bubble for today, Peloton (PTON) recalls treadmills

The weaker than expected PMI (62.7 versus 64.3 forecast) has put today's rally in jeopardy as recent weakness comes back into focus. Retail driven stocks continue to suffer while big tech names stage a modest rebound from Tuesday. Peloton (PTON) suffers as a recall on all its treadmills is ordered by the company as reported by CNBC. 

Sectors: Energy (XLE) +3%, Tech (XLK) +0.5%, Real Estate (XLRE) -1.5%, Industrials (XLI)-0.5%.

Selected stocks: PTON -8%, AAPL +1.3%, TSLA -0.2%, TWTR -1%, CCIV +2.5%, XP +13%, DISCB +10%, CZR +6%, MCFE -9%, DLB -9%, DVN +8%, BNTX +8%, AMC -1.5%, COIN -0.3%

Here is what you need to know on Wednesday, May 5:

One day of modest losses and it feels like the crash of 1929 by the tone of many media commentators. The Dow actually finished up yesterday, while the S&P 500 took a modest fall. Traders have been programmed by the Fed (and Dave Portnoy) to think that markets can never go down now. When they do, many of us totally overreact. Wait until the real reckoning comes.

Janet Yellen attempted to inject some reality into markets yesterday by saying what the Fed dare not speak of – rising rates. An unusual move for a Treasury Secretary to step on the Fed's turf but interesting as Powell's term ends in nine months.

As it stands, yesterday's wobbles look like they are being bought up already as everyone screams "Buy the dip!" in unison. To be fair, that strategy has been working well for most of the last 12 months. With the Fed having the markets back and the economy set to explode, it probably has the most risk-reward going forward.

The market is showing signs of fatigue with strong earnings this week and at last not being rewarded. In particular, big tech stocks are being punished for powerful results with analysts now saying it makes next year's comparison that much harder. In reality, companies blow out results only for analysts to say, "Well, now you are making it too hard for yourself."

VIX gave us all a little worry by popping above 20 but has recceeded and risk appears to be back on this morning as the dollar weakens slightly to 1.2010 against the euro. Gold is unchanged at $1,778, and Bitcoin is higher at $55,500. 

The Mr. Miyagi markets (risk on, risk off) are feeding through to equity indices with European markets all 1% or more higher. The Dax is +1.4%, FTSE +1%, and the EuroStoxx +1.3%.

US futures are also higher with S&P +0.4%, Dow +0.3% and Nasdaq +0.7%.

The S&P 500 did breach its 9-day moving average yesterday, so the next few sessions will be interesting to see if bears can awaken. MACD remains in a bearish crossover.

Wall Street top news

EU PMI improves to 50.5 for services, 53.8 composite reading.

US ADP employment change: +742K versus +850K forecast.

Facebook (FB) upholds former President Trump's suspension from the platform.

Boeing (BA) has a new issue with the 737 Max as electrical grounding issues prompt air safety officials to ask for more analysis-Reuters.

India still recording record new Covid deaths.

Activision Blizzard (ATVI) reported strong earnings after the close on Tuesday. Shares up 5% premarket.

General Motors (GM) beats on EPS revenue slightly behind, guidance to the top end of the range. 

LYFT shares post better than expected results. Shares up 4% premarket.

Match Group (MTCH) results better than forecast, stock up 5% premarket.

Hilton (HLT) says 97% of hotels open by end of April-CNBC. Results miss expectations.

Caesars (CZR) reports better than expected results, shares up 7% premarket.

Horizon Therapeutics (HZNP) shares down 7% premarket as EPS misses.

Westrock (WRK) results miss, shares down 6% premarket.

Devon Energy (DVN) EPS beats estimates, shares up 4% premarket.

Zillow (Z) shares up 3% premarket on better than expected Q1 sales.

Ups and downs

Under Armour (UAA): Atlantic Equities upgrades.

Community Health (CYH): Jefferies upgrades.

Ferrari (RACE): Societe Generale downgrades. Morgan Stanley lowers price target.

Kraft Heinz (KHC): DZ Bank downgrades.

Thompson Reuters (TRI): CIBC downgrades.

NVIDIA: Baird initiates as outperform.

Activision Blizzard (ATVI): Morgan Stanley raises price target.

Economic releases due

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