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Markets Avert Black Thursday Fall

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As we discussed earlier this week, today is the 30th anniversary of the stock market crash in 1987, which would later be referred to as “Black Monday.” A heavy sell-off overseas — particularly in Hong Kong and rippling out to smaller places on the Pacific Rim, most notably New Zealand — came home to roost after market overvaluations dropped the U.S. indexes by roughly 25%. It was a harrowing day in the markets, though in retrospect investors were able to climb back out of the crater in less than a year’s time.

These days, as Zacks Chief Strategist John Blank points out, there is no major country in the world undergoing a recession. This type of global growth is very rare to behold, what with the European Union (EU) working through its issues concerning Brexit (although the Catalonian vote to leave Spain is a storm still brewing) and China and its surrounding trading partners gaining economic traction. Here at home, good news regarding Q3 earnings and the labor market will likely backstop any sell-off scenarios that might follow new record highs yesterday for the Dow, Nasdaq and S&P 500.

Let’s start with the jobs market first: Initial Jobless Claims were again back within the range of robust employment after fighting through a worse-than-usual hurricane season: 222K new jobless claims last week was a precipitous drop from the previous week’s (downwardly revised) 244K, which itself was mercifully lower than the near 300K claims that came in the wake of Hurricanes Harvey, Irma and Maria. Continuing claims for the previous week fell a smidge beneath 1.89 million, also representing the low range we’ve seen over the past year or more.

The Philly Fed survey posted its strongest month in October since May, with a 27.9 read more than 4 points higher than the September headline. This survey tracks manufacturing production of the city of Philadelphia, the sixth largest municipality in the U.S. Sure, its range is limited, but metrics like this and the Empire State survey give helpful reads on economic growth by different regions.

Q3 Earnings Results

The largest telecom provider in the U.S., Verizon (VZ - Free Report) , posted decent numbers for its Q3 earnings before today’s opening bell. Earnings of 98 cents per share met the Zacks consensus estimate exactly, whereas quarterly sales of $31.72 billion surpassed the $31.45 billion expected. In an increasingly competitive market, Verizon posted 603K new wireless subscribers in the quarter. Shares of VZ are up about 2.7% in today’s pre-market; the telecom giant is actually down almost 9% year to date.

The Travelers Company (TRV - Free Report) , a major insurer that had been affected by the aforementioned hurricanes in the Southeastern portion of the U.S. last month, impressed analysts by beating estimates on both top and bottom lines: 91 cents per share blew the 52 cents expected out of the (flood) water, whereas revenues of $7.3 billion topped the $7.0 billion of the Zacks consensus.

Admittedly, much of the disaster claims are not yet showing up in TRV results this morning, but net written premiums were up in the quarter, while underwriting losses were down from the year-ago quarter.


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