Stocks Up Last Week, Putting In Their Best Week Of The Year

Market Moves You Need to See Stocks Up Last Week, Putting In Their Best Week Of The Year [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Up Last Week, Putting In Their Best Week Of The Year [Stocks Up Last Week, Putting In Their Best Week Of The Year]Image: Bigstock Stocks closed higher on Friday and higher for the week. In fact, the major indexes closed higher every day last week. And what a week it was. The Dow was up 5.07%, the S&P was up 5.85%, and the Nasdaq was up 7.01%. For all of them, it was their best week of the entire year so far. Friday's Employment Situation report was just what the market was looking for. Total new jobs for October came in at 150,000 (99,000 in the private sector and 51,000 in the public), vs. the consensus for 179,000 (143,000 private and 36,000 public). The unemployment rate ticked up to 3.9% vs. last month's 3.8% and views for the same. And average hourly earnings moderated to 4.1% y/y vs. last month's 4.3% and views for 4.0%. Additionally, August and September payrolls were revised lower. August was reduced by -62,000 (227K down to 165K), and September was reduced by -39,000 (336K down to 297K). The market cheered the news as it showed the economy continues to grow, but not so fast where additional rate hikes could be needed to slow things down. The industries with the biggest job gains last month were: Healthcare with 58,000 new jobs; Government Employment rose by 51,000; Construction added 23,000; Social Assistance jobs increased by 19,000; Leisure and Hospitality gained 19,000 as well; and Professional and Business Services added 15,000 new jobs. Friday's jobs report was just more good news after Wednesday's FOMC announcement, where the Fed left rates unchanged and strongly hinted at the idea that further rate hikes might not be needed. While they noted that "economic activity expanded at a strong pace in the third quarter" and that "the process of getting inflation sustainably down to 2% has a long way to go," they also noted that financial and credit conditions had tightened, and that there was both a risk of raising too much or too little. And with risks more balanced, they clearly felt confident in holding rates steady, and possibly calling it quits. This was made clear when Fed Chair Jerome Powell said that the dot plot (from September's meeting which forecast 1 more rate hike), "decays" as time goes by. In other words, while they said in September that we may need one more rate hike, we might not need it after all. As it stands now, the odds of a December rate hike has fallen to just 19.8%. Their next meeting is December 12-13. Earnings season kicks into high gear this week with 1,792 companies on deck to report including names like Gilead Sciences, Uber, Occidental Petroleum, Biogen, and Disney to name a handful. What a difference a week makes. It appears the long-awaited Q4 rally has finally begun. Remember, history shows if the market is up more than 10% thru July (which it was), and August is down (which it was), the remainder of the year is up 100% of the time with an average gain of 9.9% (median of 8.7%). With September and October being down as well, the market is going to have to rally even more if it hopes to match the average/median mentioned above. That leaves just two months left. But after last week, we are off to a good start. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Why Haven't You Looked at Zacks' Top Stocks?]( Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. 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