David Moenning�s Daily State of the Markets: 11/03
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Back in the Black
The bulls finally got what they were looking for yesterday. After a difficult October, yesterday�s decisive, broad-based move on strong volume and excellent breadth took the S&P 500 back into the black for the year. It was the type of session that helped convinced even the staunchest bears that stocks can actually go both directions.
A combination of positives helped the bulls put in one of the best efforts in quite some time. A decline in oil (at least in the early going) and the feeling that we�ve seen the worst of the oil spike, a rebound in tech stocks on positive news, the cumulative effect of another strong earnings season, and hopes for the traditional year-end rally all helped the major indices post strong gains.
Turning to this morning, the bulls have just received some additional good news on the economic front. Nonfarm Productivity for the third quarter came in with a gain of +4.1%, which was significantly higher than the forecast of +2.6%. In addition, the prior quarter was revised higher to +2.1% from +1.8%. But perhaps the most important aspect of the report was the fact that Unit Labor Costs, which is a major component of real-world inflation, actually FELL by -0.5%, when costs had been expected to rise by +1.8%.
In addition, the reports from retailers on Same Store Sales are coming in this morning. So far we see that Target�s sales rose by +5.7%, which was better than the expectations of +4.6%. Wal-Mart�s numbers were in-line with the numbers they provided this weekend. Saks reported sales increases of +5.7% versus +4.6%. And Costco saw sales gains of +10% versus expectations of +7.9%.
As expected, bond yields are pulling back a bit on the news and stock futures are rallying (Dow +29, S&P +3.20, and NASDAQ +5). So the question of the day is if the bulls will be able to keep this thing going?
Stocks "In Play" This Morning:
(NYSE: TGT) � Same Store Sales +5.7% vs. +4.6%
(NYSE: KSS) - Same Store Sales +6.2% vs. +3.9%
(NYSE: SKS) - Same Store Sales +5.7% vs. 4.6%
(NASDAQ: COST) - Same Store Sales +10% vs. +7.9%
(NASDAQ: WYNN) � Big miss on earnings -$0.01% vs. +$0.10
(NYSE: CLX) � EPS $0.70 vs. $0.71
GDT � Downgraded at C on possibility of deal falling thru
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions:
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
The bulls finally got what they were looking for yesterday. After a difficult October, yesterday�s decisive, broad-based move on strong volume and excellent breadth took the S&P 500 back into the black for the year. It was the type of session that helped convinced even the staunchest bears that stocks can actually go both directions.
A combination of positives helped the bulls put in one of the best efforts in quite some time. A decline in oil (at least in the early going) and the feeling that we�ve seen the worst of the oil spike, a rebound in tech stocks on positive news, the cumulative effect of another strong earnings season, and hopes for the traditional year-end rally all helped the major indices post strong gains.
Turning to this morning, the bulls have just received some additional good news on the economic front. Nonfarm Productivity for the third quarter came in with a gain of +4.1%, which was significantly higher than the forecast of +2.6%. In addition, the prior quarter was revised higher to +2.1% from +1.8%. But perhaps the most important aspect of the report was the fact that Unit Labor Costs, which is a major component of real-world inflation, actually FELL by -0.5%, when costs had been expected to rise by +1.8%.
In addition, the reports from retailers on Same Store Sales are coming in this morning. So far we see that Target�s sales rose by +5.7%, which was better than the expectations of +4.6%. Wal-Mart�s numbers were in-line with the numbers they provided this weekend. Saks reported sales increases of +5.7% versus +4.6%. And Costco saw sales gains of +10% versus expectations of +7.9%.
As expected, bond yields are pulling back a bit on the news and stock futures are rallying (Dow +29, S&P +3.20, and NASDAQ +5). So the question of the day is if the bulls will be able to keep this thing going?
Stocks "In Play" This Morning:
(NYSE: TGT) � Same Store Sales +5.7% vs. +4.6%
(NYSE: KSS) - Same Store Sales +6.2% vs. +3.9%
(NYSE: SKS) - Same Store Sales +5.7% vs. 4.6%
(NASDAQ: COST) - Same Store Sales +10% vs. +7.9%
(NASDAQ: WYNN) � Big miss on earnings -$0.01% vs. +$0.10
(NYSE: CLX) � EPS $0.70 vs. $0.71
GDT � Downgraded at C on possibility of deal falling thru
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions:
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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