US Stocks Faded In Final Week In Best Month In 4 Years
$SPY, $CVX, $XOM
US stocks faded in late October, paring the strongest monthly gain since Y 2011; financial and consumer staples shares retreated.
The S&P 500 declined 0.5% to 2,079.43 at 4:00p Friday. in New York, with the gauge up 8.3% on the month. Stocks extended to 5 their longest streak of weekly gainers this year.
We saw stocks test the August lows and a strong rally, pulling back is normal, healthy.
Analysts project profits for S&P 500 members dropped 3.9% in Q-3, improving from an estimated 6.1% decline a week ago, following better-than-forecast results from Chevron (CVX), and Exxon Mobil (XOM).
With about 67% of companies in the index finished with reporting this season, 75% have beaten profit projections, and 44% have exceeded analysts’ estimates.
The S&P 500 bounced about 12% off of its August low, driven by gains in energy and technology stock shares, the same groups that helped push the index South to its worst Quarter since Y 2011. Both are now headed for their strongest monthly increase in 4 years amid easing concern that weakness in China will spread.
Central banks dominated markets last month, with a weak US jobs report jolting equities out of a Summer swoon and sinking the USD on speculation the US Fed would keep interest rates at Zero+ into Y 2016.
Signs of weak global growth prompted the European Central Bank (ECB) to hint at extra stimulus, China unexpectedly cut its lending rate.
US Fed officials said last week that US growth was moderate, they will evaluate progress in the labor market and inflation readings when considering whether to raise rates at their December meeting.
Traders have shifted their bets on the likelihood of a December increase, pricing in a 35-50% chance of a hike by year end, compared with as low as 30% last week.
A report Friday showed household spending rose less than forecast in September, with the smallest gainer since January. Separate data showed wages and salaries rose in Q-3 at a faster pace, another report showed consumer sentiment increased less than forecast in October as Americans viewed buying conditions as less favorable than they did earlier in the month. Disappointing.
Have a terrific weekend.
Paul Ebeling
HeffX-LTN
Paul Ebeling
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