Original Link | RockwellTrading by Markus Heitkoetter
Stocks kicked off the week with nice gains.
ISM Manufacturing, rising GDP numbers, and increasing factory output helped stocks rally this week.
But the rally was also tied to the Republican tax reform proposal from a week ago.
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It’s almost 30 years since the U.S. tax code has been altered, and traders are hoping that Trump can deliver on his pro-growth tax policies. Although there are some concerns over the framework of President Trump’s tax plan, last week’s rally suggests that traders believe that the President and GOP can get things done.
Stocks were higher on Monday, Tuesday, and Wednesday. And on Thursday, the S&P finished higher for the eighth day in a row.
But on Friday, the S&P’s impressive win streak came to an end after a mixed Jobs Report.
Friday’s Jobs Report showed that Non-Farm Payrolls decreased by 33,000 jobs (traders expected an increase of 82,000 jobs). The drop was a result of hurricanes Harvey and Irma. It was the first drop in monthly payrolls since 2010.
On a positive note, Average Hourly Earnings increased by 0.5% (vs. the 0.3% increase expected), and the Unemployment Rate dropped to 4.2% (from 4.4%).
The Fed keeps a close eye on average hourly earnings. And with last months average hourly earnings higher than expected, traders now believe that there is a 93.1% chance the Fed will raise rates in December (based on fed funds futures).
Stocks finished slightly lower on Friday, and win streaks in the S&P and DOW came to an end. But the NASDAQ finished higher for the ninth day in a row. Overall it was a great week for stocks. In spite of Friday’s mixed
Overall it was a great week for stocks. In spite of Friday’s mixed results, the major indices were up 1.5%+ for the week.
Here’s where the major indices ended the week:
- The S&P finished with a 1.5% gain. Up 94 points, the S&P ended at 2,590.
- The DOW ended 1.7% higher. Adding 369 points, the DOW closed at 22,774.
- The NASDAQ was up 1.5%. With a 94 point gain, the NASDAQ finished at 6,590.
With the biggest weekly drop since May, Crude Oil (CL) finished lower for the first time in 5 weeks. Last weeks losses were due to concerns over Tropical Storm Nate. Traders are worried about the impact the storm might have on refining and crude production as the hurricane makes its way towards the Gulf Coast. Crude Oil finished the week at $49.31 a barrel.
Here are this week’s key reports (all times ET):
- MONDAY – Columbus Day, no major reports.
- TUESDAY – No major reports.
- WEDNESDAY – JOLTS Job Openings at 10:00am, FOMC Meeting Minutes at 2:00pm.
- THURSDAY – PPI Data and Unemployment Claims at 8:30am, and Crude Oil Inventories at 11:00am.
- FRIDAY – CPI Data and Retail Sales Data at 8:30am, and Preliminary Consumer Sentiment at 10:00am.
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