A Perfect Week

November 5, 2023

A Perfect Week – Nov 3 Market Recap

Indices

Dow 34,061, +1,644 or +5.07%.
Nasdaq 13,478, +835 or +6.60%.
MSCI EAFE 2031.06, +85.71 or +4.41%.
S&P 4,358, +241 or +5.85%.
USD10Y 4.558%, -28.7bp or -5.92%.
WTI Crude $80.89/bbl, -$4.41 or -4.27%.

Markets rallied between +5 and +6% across the board in what can only be described as a perfect week for the markets. The Federal Reserve declined to raise the discount rate again, for the second consecutive meeting and the economic data released this week was relatively benign:

U.S. Manufacturing in October was slightly disappointing.
ADP Private Payrolls were below expectations
September Job Openings and Labor Turnover was slightly above expectations but still below 10 million.
Initial jobless claims rose slightly week over week.
October U.S. Services were below expectations.
October Non-Farm Payrolls were below expectations.
October Average Hourly Wages were flat.
Earnings were good on average with better-than-expected reports from McDonalds (MCD), Qualcomm (QCOM), Apple (APPL), and Starbucks (SBUX).

To summarize, the Fed may be finished raising rates, inflation is moderating, corporate earnings are healthy and there is still no sign of a coming recession.

Next Week

Next week is light on both market moving earnings reports and economic data.

Economic Calendar

Monday – N/A. Earnings: N/A.
Tuesday – N/A. Earnings: Ebay (EBAY), Lucid Automotive (LCID), Rivian (RIVN), Toast (TOST), Uber (UBER).
Wednesday – N/A. Earnings: Disney (DIS).
Thursday – Initial Jobless Claims. Earnings: N/A.
Friday – November Consumer Sentiment. Earnings: N/A.

If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are accepting new clients and offer a complimentary one-hour review.

Nov 3 Daily Trading Recap…

Monday – Dow +511 to 32,928, Nasdaq +146 to 12,789, S&P +49 to 4,166, USD10Y +3.0bp to 4.875%.

All eleven S&P sectors traded higher, led by Communication Services, Financials, and Consumer Staples.
Earnings: McDonald’s beat top and bottom-line estimates on higher prices; executives expect 2023 prices to be 10% higher.

Tuesday – Dow +123 to 33,052, Nasdaq +61 to 13,851, S&P +27 to 4,193, USD10Y +0.0bp to 4.875%.

All eleven S&P sectors traded higher, led by Real Estate, Financials, and Utilities.
October Consumer Confidence came in above expectations at 102.6 vs 100 although down vs last month’s 104.3 print.
Earnings: Advanced Micro Devices (AMD) beat their earnings and revenue estimates but guided their fiscal year lower. The stock traded down over -6% until it was announced in the press conference that they would sell $2 billion in AI chips next year. AMD subsequently rallied and is now trading down marginally.

Wednesday – Dow +221 to 33,274, Nasdaq +210 to 13,061, S&P +44 to 4,237, USD10Y -8.6bp to 4.789%

Nine of eleven S&P sectors traded higher today, led by Technology, Communication Services, and Consumer Discretionary.
The Fed, as expected unanimously agreed to keep rates at their current 5.25%-5.50% target range. The CME Fed watch tool probability of another pause in December jumped from 68% to 77% on the announcement.
October ADP Private Payrolls were below expectations at 113,000 vs 130,000 but higher than last month’s 89,000 print.
October S&P U.S. Manufacturing PMI was in line with expectations and unchanged from last month’s 50 print.
October ISM U.S. Manufacturing Index dropped below expectations to 46.7% vs 49.2% expected and vs 49% last month.
September Job Openings and Labor Turnover Survey (JOLTS) was slightly higher than expected at 9.6 million job openings vs 9.4 million expected and 9.5 million last month.
Earnings: Kraft Heinz (KFT) beat revenue and earnings estimates after raising prices 15% over last year but still guided down their fiscal year; KFT traded up +2.35% in the regular session. PayPal (PYPL) beat its top and bottom-line estimates and traded up +4.07% in the extended session. Qualcomm (QCOM) beat their numbers handily and guided its current quarter higher; QCOM traded up +3.71% post close. YUM Brands (YUM) beat its earnings estimates but missed its revenue projections due to softer than expected results at Pizza Hut; YUM traded unchanged during the regular trading session.

Thursday – Dow +565 to 33,839, Nasdaq +233 to 13,294, S&P +81 to 4,318, USD10Y -12.0bp to 4.669%.

All eleven S&P sectors traded higher today, led by Energy, Real Estate, and Financials.
Jobless claims climbed to 217,000 vs 210,000 forecast and last week’s slightly revised higher print of 212,000 (originally 210,000).
Earnings: Apple (APPL) beat its earnings and revenue estimates. Starbucks (SBUX) beat earnings and revenue expectations and traded up nearly +10%.

Friday – Dow +222 to 34,061, Nasdaq +184 to 13,478, S&P +40 to 4,358, USD10Y -11.1bp to 4.558%.

Ten of eleven S&P sectors traded higher, led by Real Estate, Materials, and Communication Services.
October Non-Farm Payrolls were below expectations at 150,000 jobs vs 170,000 expected and vs last month’s 297,000 print.
October Average Hourly Wages were up +0.2%, below expectations and last month’s +0.3% print.
October Unemployment Rate edged up slightly to 3.9% vs expectations and last month’s print of +3.8%
October S&P Services PMI was slightly below expectations at 50.7 vs 50.9 expected and vs last month’s 50.9 print.
October ISM Services Index was also below expectations at 51.8% vs 53% expected and vs last month’s 53.6% print.
Earnings: AMC Theaters (AMC) lost less than expected on better revenues; AMC traded up +2.19% in the regular session.

Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets…Bitcoin, Cardano, Chainlink, Ethereum, ETHE, GBTC, and TSLA.