Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street

$DIA, $SPY, $QQQ, $RUTX, $VXX

Risk is on, sidelined money coming back in.

The earnings news is providing its share of trading catalysts, but the macro news is mattering more as a market driver because the macro connection with the employment report is that it suggests future earnings news may be better than expected.

The earnings news is providing its share of trading catalysts, but the macro news is mattering more as a market driver because the macro connection with the employment report is that it suggests future earnings news may be better than expected.

The major US indices made a nice move Friday, jump started by the much better than expected employment report for October, which featured solid growth in NFPs, sizable upward revisions to prior months, rising wages, and a pickup in the labor force participation rate.In brief, the report fostered a sense of optimism that the US economic expansion still has ample room to run, supported by a consumer who feels good about the job market and real wage gains.

Not surprisingly, cyclical sectors are out front in the rally

The energy sector (+2.0%), led by a nice gain in ExxonMobil (XOM 69.14, +1.57, +2.3%) after its earnings report and a nice uptick in oil prices ($55.31, +$1.13, +2.1%), is the best-performing sector followed by industrials (+1.5%) financials (+1.1%), and materials (+1.1%).

Semiconductors are another strong group, as the improved growth outlook and Qorvo’s (QRVO 95.69, +14.83, +18.3%) encouraging guidance have sparked increased buying interest.

The Philadelphia Semiconductor Index is up 1.6%.

Conversely, Treasury prices are lower and the CBOE Volatility Index (12.31, -0.85, -6.5%) is down sharply with today’s risk-on mindset.

The Russell 2000 is up 1.6%; the DJIA is up 0.9%; the Nasdaq Comp is up 0.9%; and the S&P 500 is up 0.8%.

This Bull may be old but it is not tired.

A Bull market that traces its lineage to the depths of the financial crisis has marked its 4th straight weekly gainer and pushing its gain in Y 2019 above 22%.

Risk sentiment got a boost from better-than-expected Chinese manufacturing data, even as uncertainty remains over an interim trade deal.

Gold fell after a 1% rally Thursday.

“Markets participants, as well as maybe even the Fed, have been very optimistic” on the trade truce, chief US economist at Pacific Investment Management Co said on TV, “We can see some more deterioration there.”

These are last Friday’s main moves in markets:

Stocks
The S&P 500 Index rose 1% as of 4 p.m. New York time.
Th Dow Jones Industrial Average added 1.1%.
The Stoxx Europe 600 Index gained 0.8%.
The MSCI Asia Pacific Index gained 0.3%.
The MSCI Emerging Market Index advanced 0.7%.

Commodities

Gold futures flat at $1,510.70 oz,
West Texas Intermediate Crude Oil gained 3.5% to $56.10 bbl.

The Trump Policies are working.

HeffX-LTN’s overall technical outlook for the US major stock market indexes is Bullish to Very Bullish for the week ended 1 November 2019.

Remember, always take what the market gives, and it is your money so your responsibility.

Have a terrific weekend
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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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