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Stocks To Watch Out For This Halloween

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Yesterday before the opening bell, the first indictments and first conviction in the Russia collusion scandal in the 2016 U.S. presidential election helped pump the brakes on the extended bull-market rally. Trump’s former campaign manager and a long-time aide face 12 grand jury charges, while a low-level Trump campaign operative has already pled guilty to lying to the FBI. Stock market indexes closed lower Monday, following seven straight up weeks.

Whether or not this becomes an albatross on the stock market depends greatly on one’s perspective: Zacks Exec VP Kevin Matras, in his latest Profit from the Pros column this morning, sees the Paul Manafort indictments as little more than a temporary distraction. Those who believe Special Prosecutor Robert Mueller is likely to end his investigation soon and has already exhausted his findings will likely feel the same way: nothing more than a blip, a market breather. Though there does seem to be a greater risk hovering that the Mueller investigation is not wrapping up but just beginning to unfold. If such is the case, market participants may be more trepidatious moving forward.

Not today, though: futures for the Dow, Nasdaq and S&P 500 are all up in Halloween Tuesday’s pre-market. Far from being spooked, or fear of a “trick,” traders and investors are apparently looking for plenty of “treats.”

With good reason, as well: while the Case-Shiller August home sales report is expected to bring 6% growth in U.S. home sales (this is a trailing indicator, but is considered to be the most sound housing data economists see regularly), the Paychex small-business report this morning demonstrates the most stable quarter in the history of the small business index. Though jobs growth has begun to slow, wage increases look to be keeping pace with economic growth. Minneapolis, Denver and Seattle were among the cities seeing the strongest small business growth.

And jobs data is expected to be strong, both tomorrow with the private-sector ADP (ADP - Free Report)  payroll report and Friday’s all-encompassing non-farm payroll report from the Bureau of Labor Statistics (BLS). Even with a hurricane-affected quarter, jobs growth is expected to remain robust, with unemployment remaining around a low-to-mid 4% range, indicative of a very strong domestic labor market.

Q3 Earnings Roundup

After the bell we expect to hear from U.S. Steel (X - Free Report)  and Electronic Arts (EA - Free Report) , but ahead of the opening bell we see plenty of strength in Q3 performance:

Mastercard (MA - Free Report)  outperformed earnings and revenue estimates, posting $1.34 per share on revenues of $3.4 billion topping the $1.23 per share and $3.3 billion expected. Quarterly sales rose 18% year over year, with higher switched transactions in the quarter and cross-border volumes up 15%. Shares are up 1.7% at this hour in the pre-market.

BP (BP - Free Report)  also trounced expectations, reporting 57 cents per share on $60.81 billion in quarterly sales, which easily beat the $8.04 billion in the Zacks consensus estimate. Oil production year over year was up 16.4%, and shares of BP rose 2.5% initially upon the quarterly news.

Other earnings beats this morning include pharma giant Pfizer (PFE - Free Report)  and consumer staples major Kellogg (K), which both beat earnings expectations. Pfizer was in-line on its top-line, while Kellogg outperformed our consensus. Both stocks are trading up in today’s pre-market.

Under Armour (UA - Free Report) , however, is a much different story: although earnings of 22 cents per share beat estimates by 4 cents, quarterly sales posted a miss. More importantly, revenue and sales guidance were both pointed lower on lower North American demand and other operational challenges. UA stock, which had already fallen more than 40% year to date, are another 14.5% lower ahead of the opening bell.