STOCK MARKET COMMENTARY:
FRIDAY, NOVEMBER 08, 2013
MONDAY-WEDNESDAY’S ACTION: Market Refuses To Fall
Stocks rallied on Monday led higher by small cap stocks. Due to the government shutdown, the Census Bureau released factory orders reports for August and September at the same time. The report rose by +1.7% in September after declining -0.1% in August. July factory orders were revised down from -2.4% to -2.8%.
THURSDAY & FRIDAY’S ACTION: STOCKS STAY POSITIVE FOR THE WEEK
Stocks fell hard on Thursday after the much anticipated Twitter (TWTR) IPO started trading. Before the bell, the ECB surprised the Street when they cut rates to stimulate their economy. This sent the Euro plunging and stock futures soaring. Shortly thereafter, US GDP beat estimates which strengthens the case for the Fed to taper QE. This caused a slew of growth stocks and all the major averages to fall in heavy trade. Interestingly, the drop was very short-lived (for now) as buyers showed up on Friday after the jobs report topped estimates. The Labor Department said US employers added 204k new jobs in October, easily beating estimates for a gain of 120k. Stocks edged higher, helping the S&P 500 close higher for the 5th straight week after US consumer confidence missed estimates ahead of the holiday shopping season.
MARKET OUTLOOK: SPX STAYS POSITIVE FOR THE WEEK
The market is very strong and at this point it is simply pausing to digest its recent and robust rally. We will monitor the health of the market to see if this turns into another short term pullback or something more substantial. Remember, we focus more on how stocks react to the news than the news itself. So far, the action has been very healthy which bodes well for this very strong bull market. Please note that our goal is to remain in sync with the broader trend of the market (up or down) and not get caught up with the minutiae of changing labels on the market status very often. As always, keep your losses small and never argue with the tape.