Get The Ticker Tape delivered right to your inbox.

X
Market Update

Can Full Fed Docket, Job Market Clues Fuel Stock Win Streak?

Print
November 4, 2015

Stocks bend higher in early action Wednesday, setting up the major averages for what could be a third straight day for gains, and so far largely untouched by a report showing slower private-sector job growth. Asian and European equity gains lend support after an uptick for energy shares yesterday and today helped elevate broader global stock market measures.

Stock traders continue to monitor the earnings situation, which includes a lighter round of mostly upside surprises and Facebook (FB) still due to report in the after-hours session.

The Federal Reserve policy guessing game remains in play, too. Several Fed officials will speak throughout the day, although the key event is perhaps testimony by the central bank’s chief Janet Yellen to the House Financial Services panel on bank regulation at 10 a.m. Eastern. New York Fed President William Dudley will give a press briefing on research on income inequality at 2:30 p.m. Eastern, but may take questions on the near-term economy, while Fed Vice Chairman Stanley Fischer will speak to the National Economists Club at 6 p.m. Eastern.

As Fed members prepare to speak, short-term Fed funds futures market traders have priced in a 56% chance that the Fed activates the first interest rate hike since 2006 when it meets in December. That’s according to pricing calculations provided on the CME Group’s FedWatch Tool. That’s up from the 35% odds priced in right after the Fed took a pass on an October rate change but issued a statement entertaining the thought of a December hike. Traders in this market see a 64% chance for a hike in January and a 76% chance in March.

SPX stock chart

FIGURE 1: QUITE THE RUN?

The S&P 500 (SPX), charted on the new-look thinkorswim® platform, has rallied some 13% in a short five weeks. Index leaders were technology, health care, and consumer discretionary stocks. Data source: Standard & Poor’s. For illustrative purposes only. Past performance does not guarantee future results.

ADP: Slightly Slower Pace. Private-sector employment gains continued in September at a slightly slower pace than in the prior month. Payroll processing firm ADP counted 182,000 new jobs across the private sector last month. ADP revised August's gain down slightly to 190,000 from a prior estimate of 200,000. Wall Street economists use ADP's data as a first read on what could show up in the Labor Department's broader employment report; the next one is due out Friday morning. Economists polled by MarketWatch expect the government's report to show that nonfarm payroll rose by a 177,000 jobs last month, up from the gain of 142,000 in August.

Tesla Shares Roar. Tesla Motors (TSLA) stock was up sharply late Tuesday and early Wednesday. The luxury electric car maker issued a wider loss than a year-ago comparable. But it stuck to sales goals for the year and that was enough to cheer the bulls immediately after the report’s release. Tesla said it lost an adjusted $75 million, or $0.58 per share, compared with an adjusted loss of $0.48 a share in the year-ago period. Adjusted revenue hit $1.24 billion, up 33% from a year ago. Results were largely in line with Street expectations. Tesla said it expects to build 17,000 to 19,000 vehicles in Q4, bringing the total for 2015 to 50,000 to 52,000 vehicles. That's a slight tweak from a previous company forecast of 50,000 to 55,000 vehicles for the year.

Also in Earnings News … Lumber Liquidators (LL) issues a quarterly loss and names a new CEO; Time Warner (TWX) profit and revenue beat Street expectations; Wendy’s (WEN) stock is a strong early gainer after execs say its shift to a largely franchise model has boosted results; Michael Kors (KORS) gains after its profit and revenue top industry analysts’ expectations.

Good Trading,

JJ

@TDAJJKinahan

Miss Market Drive? No Sweat

Enrich your options education with a post-Market Drive webcast series. Log in to thinkorswim®. Click the Support/Chat button. Select the Chat Rooms tab. Click Swim Lessons.

Scroll to Top