Thursday, November 10, 2016
So much for a Trump victory tanking the stock market. Following a 23+ point gain in the S&P 500, +257 on the Dow and +57.50 on the Nasdaq, we now see futures still way up: +13 S&P, +111 Dow and +34 Nasdaq. The Dow, in fact, is poised to open at record intra-day highs. Apparently, negative market prognosticators from Tuesday night might need to sit in the corner (with all those election pollsters).
Yes, hope is in the air, and decidedly not the Obama kind. Once the smoke cleared from the surprise election results, market participants now see a clear path to increased growth and prosperity: with a Republican Congress providing tailwinds, President-elect Trump looks to have smooth sailing ahead for reducing corporate taxes, de-regulating Wall Street, and other projects on his to-do list starting next year.
Not only near-term market activity, but 10-year bond yields have also broken out: from stubbornly low 1.7s all through the summer, we now see a 2.11% yield in the 10-year. This is the highest read since January.
These Japanese Nikkei has even bounced back — +6% over night, and other Asian markets were up, as well. The yen is up, as is the British pound, while the euro has slipped overnight. The WTI and Brent crude oil reads are down 1% and 0.5%, respectively, at this hour.
This may put a new wrinkle into next month’s Fed decision to raise rates. This new hopefulness the market seems to be feeling may push economic activity forward, and if that happens the Fed may have no choice but to bump up interest rates another quarter point on December 14th — especially now that Trump announced yesterday he does not intend to seek the resignation of Fed Chair Janet Yellen.
Jobless Claims Down Again
We saw jobless claims fall by 11,000 last week in today’s latest read to 254K, from an unchanged 265K last week. Continuing claims rose to 2.041 million from a downwardly revised 2.023 million last week. The U.S. labor market remains is a good range for fostering economic growth, though we’ve seen good jobs numbers and sluggish growth for quite awhile now.
Q3 Earnings Roundup
Macy’s (M - Free Report) posted a disappointing Q3 bottom line before the bell today on quarterly sales that missed estimates only modestly. Year over year the major retailer is down, but the company has kept guidance in-line and expects big things in the all-important Q4 holiday season.
Ralph Lauren (RL - Free Report) beat analyst estimates in its Q3 report today. Shares rose nearly 3% on the news. Over-the-counter drug maker Perrigo (PRGO - Free Report) beat estimates on both top- and bottom-lines, while keeping its full-year forecasts intact. SodaStream (SODA - Free Report) also topped analyst expectations for Q3 earnings and sales.
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