Stock Market Update Friday November 1, 2024 Stocks opened November on a positive note, with market participants largely disregarding a weaker-than-expected U.S. jobs report, which indicated that only 12,000 jobs were added in October. The limited employment growth was attributed to disruptions from recent hurricanes and the Boeing strike, which impacted multiple sectors. The unemployment rate held at 4.1%. Equities experienced a moderate rebound following the preceding day's significant downturn, as the S&P 500 retraced a portion of its earlier gains to close up by 0.4%. However, the index remains down 2% for the week, highlighting the ongoing volatility in the market.
Away From Stocks: Treasuries faced significant selling pressure, as yields on long bonds surged 10 basis points to 4.57%. The 10-year note closed at 4.38%, markedly higher than the 3.74% recorded just a month prior. Meanwhile, WTI crude oil slipped below the $70 per barrel mark, and gold prices remained subdued at $2,733 per ounce. Bitcoin experienced a pullback, approaching the $69,000 threshold. The VIX index concluded the trading session just below 22, reflecting heightened market volatility.
So far, 339 companies—representing 68% of the S&P 500—have reported their quarterly results. The earnings season has been predominantly positive, with 78% of these companies surpassing analyst estimates, achieving an earnings surprise of a median 6% above expectations. Among the 22% that fell short, the median miss was approximately -4%.
On the revenue front, companies reporting have generally outperformed projections with a median top-line beat of 4%. Meanwhile, companies that did not meet revenue expectations reported a median shortfall of -3%. Impressively, 60% of reporting companies exceeded revenue estimates, highlighting a solid performance across the board in this earnings cycle.
November 4 Monday
10:00 AM: Sep F Durable Goods Orders - n/a, Previous -0.8
Bottom Line:
A sell alert was activated on October 30, 2024 in the Dow Jones Industrial Average ETF (DIA) and the S&P 500 Equal Weight ETF (RSP), indicating elevated downside risk in these indexes. At this time, we recommend against initiating or adding positions within these sectors, given current market conditions and the heightened caution advisable for equity allocations. Notably, the S&P 500 SPY ETF, QQQ ETF, and Russell 2000 IWM ETF continue to maintain buy signals. For a broader market sell-off to materialize, sell triggers across all major indices would be required, underscoring the resilience observed in select segments of the market. We have a cycle pivot date on October 29th, and traders should anticipate increased volatility leading up to this date as market participants position themselves ahead of the upcoming 2024 election. Our previous pivot date was October 8th, following which the SPY rallied for seven trading days to reach a record high on October 17th. This pattern of sideways, choppy price action is characteristic of October in an election year. Our year-end outlook remains optimistic, supported by our proprietary algorithm and favorable liquidity conditions. Cash on the sidelines continues to accumulate, creating potential for a strong inflow into equities. Jerome Powell & Co. maintain a dovish stance, reflecting a "no landing" economic scenario, while China's PBOC has introduced significant monetary easing, adding further global stimulus. October's volatility aligns with historical seasonal patterns; yet we believe markets will resume an upward trajectory following the election, paving the way for a strong December rally. The VIX is projected to settle in the 10-11 range, indicating a reduction in implied volatility as we approach the holiday season, which typically supports a risk-on sentiment in equity markets.
Election Date: Tuesday, November 5, 2024 Key state polls align with national surveys, reflecting a highly competitive race for the White House with most outcomes within statistical margins of error. Both campaigns are allocating resources strategically to the six swing states. Wisconsin, Nevada, Michigan, Pennsylvania and North Carolina. Polls indicate tight races in each jurisdiction. Market participants are closely monitoring the upcoming U.S. election results, but we anticipate a favorable market reaction regardless of the outcome, as either candidate is expected to support short-term growth.
