Futures: Jobs data may rewrite Powell

Dow futures rose early Friday, along with S&P 500 and Nasdaq futures, with the October jobs report looming large.




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The stock market rally, now under pressure, continued to digest Fed Chairman Jerome Powell’s hawkish comments that the peak or “end” of the fed funds rate could be higher than previously expected.

Major indexes fell on Thursday morning. They rebounded from early lows, with the Dow Jones briefly turning positive, but stocks faded into the close.

Megacap techniques continue to put the burden on major indices, especially the Nasdaq. Join Microsoft Amazon.com (AMZN), a parent on Facebook meta pads (META) and Google Parent the alphabet (GOOGL) in identifying bear market bottoms. apple (AAPL) is still above the June low, but this week it fell back towards its October lows.

Key factors included Thursday night’s earnings Amgen (AMGN), howling (howling), EOG موارد Resources (EOG), PayPal (PYPL), parental square roadblock (SQ), Progyny (PGNY), Cloud Flare (NET) and Paylocation (PCTY).

Amgen stock changed slightly while Yelp and PYPL stock fell. NET stock is down, too, with cloud software names crashing overnight. SQ stocks rose and PGNY jumped. PCTY has not yet been traded.

Cardinal’s health (CAH) reports early Friday, with CAH stock extending slightly from buying territory.

Jobs Report

Economists expect the October jobs report to show a nonfarm payroll increase of 210K, with the unemployment rate rising to 3.6%. This will be the third straight month of slowing hiring and the lowest job gain since December 2020, but it’s not great enough to satisfy the Fed.

There are reasons to believe that the October employment data will be much weaker than expected.

However, other employment data this week was hotter than expected, including job opportunities for September and weekly jobless claims.

The October jobs report on Friday will be central to the Fed rate hike expectations and possibly the direction of the stock market, at least in the short term. The November jobs report and two CPI inflation reports will also be released before the Federal Reserve’s December meeting.

Markets now see a 52% chance of a 50 basis point rise on Dec 14th.

Dow jones futures contracts today

Dow futures are up 0.5% against fair value. S&P 500 futures rose 0.7% and Nasdaq 100 futures rose 0.7%.

The 10-year Treasury yield rose 4 basis points to 4.16%.

US crude oil futures rose nearly 4% to exceed $91 a barrel. Copper futures are up about 5%.

Hong Kong’s Hang Seng Index jumped 5.4% and the Hang Seng Technology Index jumped 7.5%, amid fresh social media talk that China will ease its non-proliferation policy.

The Labor Department’s October jobs report is due at 8:30 a.m. ET on Friday. Expect big moves, possibly a sharp one, for Dow Jones futures and Treasury yields.

Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.


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stock market rise

The stock market rally lost more steam on Thursday, with the Nasdaq struggling once again.

The Dow Jones Industrial Average was down 0.5% in stock trading Thursday. The S&P 500 fell 1.1%. The Nasdaq Composite tumbled 1.7%. Small-scale Russell 2000 gave up 0.6%.

The 10-year Treasury yield rose 6 basis points to 4.12%, but from an intraday high of 4.2%. The dollar jumped after a strong bullish reversal on Wednesday.

US crude oil prices fell 2% to $88.17 a barrel, amid the dollar’s strength and concerns about global demand.

Apple Stock, Megacaps

Apple shares sold 4.2%. Now down 10.2% for the week, the Dow Jones, S&P 500 and Nasdaq giants have pulled back from the 200-day line and are back from the 50-day line.

Google shares fell 4.1%, hitting their lowest level in two years. GOOGL stock is down 10.4% for the week.

Microsoft stock fell 2.7% to 214.25, finally breaking through its October lows to its worst since January 2021. MSFT stock is down 9.2% this week.

Amazon stock lost 3.1% to its lowest point since March 2020. AMZN stock is down 13.6% this week.

META stock fell 1.8%, hitting a seven-year low. The Facebook parent lost 10.4% this week after crashing nearly 24% last week.


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ETFs

Among the top ETFs, the Innovator IBD 50 ETF (FFTY) is up 0.4%. The iShares Expanded Tech-Software Sector (IGV) ETF (IGV) slipped 2.5%, with MSFT stock a major component. The VanEck Vectors Semiconductor Index (SMH) lost 1.2%.

The SPDR S&P Metals & Mining ETF (XME) was down 0.3%. The US Global Gates Index (JETS) was down 0.1%. The Energy Select SPDR ETF (XLE) is up 1.85% and the Financial Select SPDR ETF (XLF) is down 1.1%. The SPDR Healthcare Sector Selection Fund (XLV) is down 0.4%.

Reflecting the speculative story stocks, the ARK Innovation ETF (ARKK) is down 0.7% and the ARK Genomics ETF (ARKG) is down 0.9%.


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Market Rise Analysis

The stock market rally moved into “uptrend under pressure” after Wednesday’s big bearish reversal on Fed Chair Powell’s hawkish comments.

The Nasdaq closed below its follow-up day low on October 21st. This is a very bearish signal for a market rally, although the Nasdaq was clearly lagging in the current uptrend. Other major indices are well above FTD lows, although the S&P 500 fell below the 50-day line and Dow Jones broke the 200-day line.

The selling continued on Thursday, with the Nasdaq once again leading lower and finishing near session lows.

This is due in large part to the huge platforms like Apple, Amazon, Microsoft, Google, and Meta Platforms.

The S&P 500, Dow Jones, and Russell 2000 performed better, but it faded to the end.

Russell 2000 managed to finish above the 50 day and 21 day streaks.

The Invest S&P 500 Equal Weight ETF (RSP) was down 0.5%, much better than the heavyweight S&P 500, but closed below 50 days.

Don’t overestimate the resilience of the market outside Apple and the big companies. The Russell 2000 Index and RSP ETF reversed strongly on Wednesday, along with most of the blue chips. And they lost more ground on Thursday.

With the Fed once again consolidating its hawkish stance and Treasury yields rebounding, the stock market will struggle to hold its own, let alone make meaningful progress.

Friday’s jobs report may support a market rally, or send major indicators towards bearish market bottoms.


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What are you doing now

With the market under pressure and blue-chip stocks volatile, investors must maintain their exposure. If the rally rebounds, like the S&P 500 retraces its 50-day line, this could be a signal to consider gradually increasing exposure again.

There are a number of stocks that are relatively close to being exercisable. So work on those watchlists. Stay engaged and be flexible until you’re ready to add exposure or move to the sidelines.

Read the big picture every day to stay in sync with market trend, stocks and leading sectors.

Please follow Ed Carson on Twitter at Tweet embed For stock market updates and more.

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