Stocks Stage Impressive Rebound, All Eyes On This Morning's Employment Report

Plus New Zacks Strong Buys for Friday, October 4 Profit from the Pros Stocks Stage Impressive Rebound, All Eyes On This Morning's Employment Report Stocks staged an impressive rebound yesterday. After being down sharply in the morning, they ended up finishing solidly higher. After the major indexes essentially tested their 200-day moving average, stocks almost immediately bounced back up. The markets are still down for the week. But the recent pullback does not look ominous in the least, and instead, just looks like ordinary market action. In other news, Weekly Jobless Claims rose 4,000 to 219K, just a tad higher than the consensus for 216K. But the persistently low numbers shows the strength in the labor market. The PMI Services Index came in as expected at 50.9, which was up from last month's 50.7. Although, the ISM Non-Manufacturing Index declined to 52.6 vs. last month's 56.4 and views for 55.5. Both service numbers were above the 50 threshold indicating expansion. But the cushion has gotten smaller. Factory Orders edged lower as well, giving up -0.1%, but beat expectations which were looking for -0.6%. But this morning's Employment Situation report is what the market has been waiting for all week. The consensus is for 145,000 new jobs (135K from the private sector, and 10K from the public), while the unemployment number is expected to stay the same at 3.7%. It will be interesting to see how the market reacts in the short-term. Some will cheer a strong number, while others might not and say it reduces the chance the Fed cuts rates again on October 30th. But then you've got others that will bemoan a soft number as bad for the economy, while others will be glad as it increases the chance the Fed cuts rates at the end of the month. Personally, I think the manufacturing numbers, earlier this week, all but sealed the deal on another rate cut. And the manufacturing weakness stemmed largely from exports due to a slowdown in the global economy. Fortunately, the U.S. economy is strong (our annual GDP is pacing at a better rate than the average annual GDP of this entire 10½ year expansion), but there are real headwinds from overseas. And with the Fed insisting they will "act as appropriate to sustain the expansion" (i.e., cut rates), the odds are increasing that we're getting another one. In the meantime, jobs will be the main focus today. And I'm hoping for good news, because over the long run, good news is always good news. We'll also get International Trade numbers this morning. With exports being in the spotlight, this will be a closely watched report as well. And lastly, Fed Chairman Jerome Powell will be speaking this afternoon (2:00 PM ET) in Washington, DC at the "Fed Listens: Perspectives on Maximum Employment and Price Stability" event. Given this morning's employment numbers and the relevance of the topic, it's possible he might have something to say about today's report. Either way, it should be a busy day. 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