S&P 500 (SPY) Report – 11/03/23
Good morning traders!
The S&P 500 ($SPY) is trading above yesterday’s close. Let’s get into it…
Stock futures jump higher on Friday as a response to a weaker-than-anticipated jobs report. This report, indicating slower employment growth and a slight uptick in unemployment, led to a decrease in bond yields, a factor that usually influences stock market performance. Stock futures, which are indicative of investor sentiment about the market’s direction, showed increases across the major indexes.
The October jobs report revealed that the U.S. economy added only 150,000 jobs, falling short of the 170,000 jobs predicted by Dow Jones and showing a reduction from the 297,000 jobs added in September. Furthermore, the unemployment rate experienced a slight increase to 3.9%, defying expectations that it would remain unchanged. In addition, the report highlighted that average hourly earnings grew by 0.2% in October, which was below the forecasted 0.3%. These figures suggest a deceleration in economic growth and may impact decisions on monetary policy.
In the bond market, yields, which move inversely to prices, dropped significantly. The 10-year Treasury yield declined by over 9 basis points to 4.57%, and the 2-year Treasury yield fell by 7 basis points to 4.9%. This decrease in bond yields can make stocks more attractive to investors, as lower yields on bonds may lead them to seek higher returns in the equity markets. The yields are significantly down from their highs, indicating a shift in investor confidence and expectations.
In the news, individual company performances varied, with tech giant Apple experiencing a 3% decline after projecting weaker revenue for the upcoming quarter despite surpassing sales and earnings expectations previously. In contrast, Block’s stock surged by 16% following an earnings beat and a positive revision of its full-year guidance. Paramount Global also enjoyed a 4.5% boost due to a strong earnings report. Overall, despite mixed corporate results, the stock market is trending towards significant weekly gains, suggesting investors may believe that the period of aggressive interest rate hikes could be nearing its end.
Friday Economic Events:
Employment Report 8:30am ET – High Volatility Expected
PMI Composite Final 9:45am ET – High Volatility Expected
ISM Services Index 10:00am ET – High Volatility Expected
Baker Hughes Rig Count 1:00pm ET
Fed Speaker Scheduled:
No Fed Speakers Scheduled
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