October 4th Market Overview

October 4th Market Overview (no fluff)

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Happy Friday everyone.

The weekend is almost here and on top of that - we are ending on a nicely green market day. Today’s jobs report paints a picture of a economic resilience but these ongoing geopolitical tensions and US election reactions could quickly shift market sentiment.

Lets dig in…

Executive Summary

  • S&P 500 ▲ 0.6% on robust September jobs report: 254,000 jobs added vs. 150,000 forecast

  • Energy sector poised for best week since 2022, ▲ 6.8% week-to-date

  • $ANF ▲ 8% after JPMorgan adds to positive catalyst watch list

  • Major indices on track to snap three-week win streak despite Today’s gains

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Market Overview

U.S. stocks rallied Friday, in part by a surprisingly strong September jobs report. The S&P 500 climbed 0.6%, the Nasdaq jumped 0.7%, and the Dow Jones added 114 points (0.3%).

Today’s momentum hasn’t been enough to offset losses earlier in the week, leaving major indices poised to break their three-week winning streak.

Key Market Drivers

  1. Jobs Report: September nonfarm payrolls grew by 254,000, far exceeding the 150,000 forecast. Unemployment rate dipped to 4.1% from 4.2%.

  2. Oil Prices: Crude oil rose again today, bringing week-to-date gains close to 9% amid escalating Middle East tensions.

  3. Port Strike Resolution: The two-day U.S. port strike was suspended Thursday, alleviating potential supply chain disruptions.

Stock Spotlight

  1. $SPIR ▼ 26%: Spirit Airlines plummeted on reports of potential bankruptcy filing.

  2. $ANF ▲ 8%: Abercrombie & Fitch surged after JPMorgan added it to positive catalyst watch list.

  3. $RIVN ▼ 8%: Rivian Automotive slipped after cutting 2024 annual production guidance due to supply shortages.

  4. $JBLU ▲ 15.5%: JetBlue Airways jumped, potentially benefiting from Spirit Airlines’ troubles.

  5. $ZIM ▼ 9%: Zim Integrated Shipping Services fell following U.S. port strike resolution.

Other Magnificent 7 Updates

$TSLA, $AMZN, and $NFLX were among the big boy tech names climbing on Friday, contributing to the Nasdaq’s outperformance. $AMZN notably gained after analysts projected potential $20 billion annual savings through autonomous delivery solutions.

Surprisingly $NVDA is only up 1.34% as of writing this.

Other Notable Company News

  • $VST (Vistra): Shares hit a new 52-week high, leading S&P 500 gains with a week-to-date increase of nearly 17%.

  • $META: Trading at all-time high levels since its May 2012 IPO.

  • $XOM aka Exxon Mobil: Reached all-time highs dating back to its 1920 NYSE listing - fueled off the oil momentum we have seen this week.

Sector Watch

Sector

Symbol

% Change

Energy

XLE

+0.75%

Technology

XLK

+0.74%

Financials

XLF

+1.37%

Consumer Discretionary

XLY

+1.13%

Communication Services

XLC

+0.81%

Industrials

XLI

+0.28%

Healthcare

XLV

-0.09%

Materials

XLB

-0.06%

Consumer Staples

XLP

-0.01%

Utilities

XLU

-0.20%

Real Estate

XLRE

-0.74%

Bond Market

Yields showed slight positive movement as investors reassessed expectations for the Feds policy in light of the strong September job reports.

Policy Watch

The jobs report likely lowers the chances of aggressive rate cuts by the Federal Reserve.

The central bank’s next meeting is scheduled for November 6-7, following the U.S. presidential election. We will likely continue to see cuts - just not as aggressive as the other weeks 50bps cut.

What to Watch

  1. Middle East Tensions: Keep an eye on geopolitical developments that could further impact oil prices and energy sector stocks.

  2. Earnings Season: With Q3 earnings season approaching, watch for early reports that could set the tone for market expectations.

  3. Fed Speeches: Monitor upcoming Federal Reserve official speeches for clues on how the strong jobs report might influence monetary policy decisions.

  4. Inflation Data: Next week’s Consumer Price Index (CPI) report will be crucial in shaping expectations for Fed policy and market direction.

P.S. 
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- JB

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