Stocks Up On Fed Announcement, Focus Shifts To Earnings And Jobs

Market Moves You Need to See Stocks Up On Fed Announcement, Focus Shifts To Earnings And Jobs [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Up On Fed Announcement, Focus Shifts To Earnings And Jobs [Stocks Up On Fed Announcement, Focus Shifts To Earnings And Jobs]Image: Bigstock Stocks closed sharply higher again yesterday, making it 3 up days in a row for the Dow and the S&P, and 4 up days in a row for the Nasdaq. The main event was yesterday afternoon's FOMC announcement. As expected, they left rates unchanged, making it the second consecutive meeting where they paused on rates. Ironically, they noted that "economic activity expanded at a strong pace in the third quarter" vs. previous language that said it expanded at a "solid pace." And at Fed Chair, Jerome Powell's press conference, he remarked that "The process of getting inflation sustainably down to 2% has a long way to go." But the Fed also noted that financial and credit conditions had tightened. And that there was both a risk of tightening too much or too little. With these risks more balanced, holding rates where they were was the natural choice. But they made it clear they were not considering cutting rates at this time. Their next meeting is set for December 12-13. But they said they have not made any decision on what comes next, adding that "The committee will always do what it thinks is appropriate at the time." Clearly the market liked what it heard, and rallied on the news. In other news, yesterday's ISM Manufacturing Index came in at 46.7 vs. last month's 49.0 and views for the same. Construction Spending rose 0.4% m/m which was in line with the consensus. On a y/y basis it's up 8.7% vs. last month's upwardly revised pace of 7.6%. And the ADP Employment report came in at 113,000 private payroll jobs, which was under the consensus for 145,000. The weaker number was interpreted bullishly since a slowing economy suggests the higher rates are finally working, as opposed to a hotter than expected jobs report which suggests more rate hikes could be needed. But the jobs report everyone is really waiting for is Friday's Employment Situation report by the Bureau of Labor Statistics (or BLS). That estimates as many as 183,000 new jobs were created last month (143K in the private sector and 40K in the public), with the unemployment rate staying the same at 3.8%, and average hourly earnings to have moderated to 4.0% from last month's 4.2%. The BLS private payroll estimate is consistent with the ADP estimate (even though they came in -22% below the those estimates). A weaker showing on Friday (although not too weak), should be interpreted bullishly as well. But it should be known that the ADP report has a spotty track record of predicting what the BLS report will say. So we will all have to wait and see. In the meantime, today we'll get Weekly Jobless Claims, the Challenger Job-Cut Report, and Factory Orders. And more earnings with 569 companies set to report with Eli Lilly, Novo Nordisk, and Starbucks going before the open, and Apple reporting after the close. It's been a great week so far. And the S&P and Nasdaq have exited their correction territory (defined as being down by -10% to -19.99% from their recent high close), although they are still in pullback territory (-5% to -9.99% from their recent high close). For context, however, the Dow is up 0.38% YTD, with the S&P up 10.4%, and the Nasdaq up 24.8%. Earnings season has been coming in stronger than anticipated, and is only expected to improve with Q4 estimated to be up 5.3%, and Q1 of 2024 to be up 6.7%. And that bodes well for stocks. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research ["If I lost it all, here's how I'd get it back"]( Free guide reveals how to grow a small trading account even if you're starting from scratch. [Click here for instant access.]( Most Popular Articles from Zacks.com [Earnings Growth Turns Positive]( With more than 60% of the Q3 results already out, earnings growth for the quarter is on track to turn positive despite the significant Energy sector drag. [Read More »]( [Earnings Season Top Performer: A Must Own Cloud Solutions Stock]( A banner quarter has sent Arista Networks stock 25% in three days. [Read More »]( [2 Stocks to Consider From a Flourishing Security Industry]( Companies in this space are benefiting from the rising demand for IT security solutions. [Read More »]( [How to Pick Stocks During a Sell-Off]( With the S&P 500 falling from recent highs, we take a look at stocks that should investors be putting on their watch lists. [Read More »]( [Target Date ETFs For Retirement Investors]( These funds are meant for 'set it and forget it' investors as the exposure shifts from riskier to more conservative over 'glide paths' as the target retirement year approaches. [Read More »]( [Zacks Reveals Electric Vehicle "Sleeper Stock"]( One little-known company could be at the center of the innovative and ever-growing electric vehicle industry. According to Goldman Sachs, EVs are predicted to account for more than 50% of global car sales by 2035. That's an impact that rivals the release of the iPhone. It's no wonder why the EV market is on fire. They allow customers to travel remarkable distances on a single charge, experience relatively silent acceleration, take advantage of state-of-the-art autonomous driving features, and much more. The latest Special Report from Zacks uncovers a stock hiding under Wall Street radar, plus 4 other must-buys. Distribution of the report is limited, so download your copy now. [Download Now »]( [Bull of the Day: Amazon.com, Inc. (AMZN)]( The ecommerce giant topped third-quarter earnings and revenue estimates last week and raised its guidance. [Read More »]( [New Zacks Strong Buys for November 2nd]( Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. [Read More »]( More Zacks Resources Mobile App Download our app for convenient on-the-go access to even more—daily and weekly newsletters published by Zacks experts, proprietary research and tools, and Portfolio Tracker on Zacks.com. [Download our Zacks App for Apple iOS]( [Download our Zacks App for Android]( Zacks Members' Success Stories Visit [Success Stories]( to hear how Zacks research, tools and portfolios help our members outperform the market. Get all of our market insights and much more when you connect with us. [Visit Zacks on Facebook]( [Follow Zacks on Twitter]( [See Zacks videos on YouTube]( [Join Zacks on LinkedIn]( [Read Zacks Commentary on StockTwits]( This free resource is being sent by [Zacks.com](. We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms of Service". [www.zacks.com/terms_of_service]( Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research is not a licensed securities dealer, broker or US investment adviser or investment bank. The Zacks #1 Rank Performance covers the period beginning on January 1, 1988 through October 2, 2023. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank #1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit [( for information about the performance numbers displayed above. Zacks Emails If you would prefer to not receive future profit-producing emails from [Zacks.com]( the primary purpose of which is the commercial advertisement or promotion of a commercial product or service, then please [click here]( and confirm your request. If you have trouble with the unsubscribe link, please email support@zacks.com. Zacks Investment Research 10 S. Riverside Plaza, Suite 1600 Chicago, IL 60606