Stock Market Update

[BRIEFING.COM] The stock market trades higher, benefitting from buy-the-dip interest after yesterday's tech-led selloff. The S&P 500 shows a 0.7% gain and the Nasdaq Composite trades 1.1% higher. Amazon.com (AMZN 198.44, +12.04, +6.5%) has contributed to the upside bias following its earnings report while Apple (AAPL 222.65, -3.27, -1.5%) goes against the grain, trading lower after its quarterly results.

Buyers have not been deterred by volatile action in Treasuries. The 10-yr yield is up five basis points from yesterday at 4.34% after dropping to 4.23% in response the October jobs report. The report was much weaker than expected, showing a huge miss relative to expectations even if one allows for a 100,000 or so drag from the effects of the hurricanes and strikes.

Nonfarm payrolls increased by 12,000 and private nonfarm payrolls decreased by 28,000. Also, the ISM Manufacturing Index was weaker than expected in October. 

Gains in the stock market are relatively broad based despite the move in Treasuries. The equal-weighted S&P 500 shows a 0.3% gain. 

The S&P 500 consumer discretionary sector has outperformed the broader market, trading 2.3% higher thanks to the earnings-related gain in Amazon.com and a gain in Tesla (TSLA 252.21, +2.35, +0.9%). The information technology sector is the next best performer, trading 0.8% higher.

The rate-sensitive real estate (-0.8%) and utilities (-1.5%) sectors show the largest declines. 

Reviewing today's economic data:

• October Nonfarm Payrolls 12K (Briefing.com consensus 120K); Prior was revised to 223K from 254K, October Nonfarm Private Payrolls -28K (Briefing.com consensus 105K); Prior was revised to 192K from 223K, October Avg. Hourly Earnings 0.4% (Briefing.com consensus 0.3%); Prior was revised to 0.3% from 0.4%, October Unemployment Rate 4.1% (Briefing.com consensus 4.1%); Prior 4.1%, October Average Workweek 34.3 (Briefing.com consensus 34.2); Prior was revised to 34.3 from 34.2
  • The key takeaway from the report is that it has reinvigorated the market's view that the Fed will stay on a steady rate-cut path that will include cutting the target range for the fed funds rate by 25 basis points at next week's FOMC meeting and again at the December FOMC meeting.
• October S&P Global US Manufacturing PMI - Final 48.5; Prior 47.8
• October Construction Spending 0.1% (Briefing.com consensus 0.0%); Prior was revised to 0.1% from -0.1%
  • The key takeaway from the report is that private construction activity was subdued in September.
• October ISM Manufacturing Index 46.5% (Briefing.com consensus 47.6%); Prior 47.2%
  • The key takeaway from the report is that it has reinforced the understanding that conditions in the U.S. manufacturing sector remain weak.