- The Dow closed up 288 points or 0.69%,
- Nasdaq closed up 145 points or 0.80%,
- S&P 500 closed up 23 points or 0.41%,
- Gold $2,744 down $5.40 or 0.19%,
- WTI crude oil settled at $69 up $0.16 or 0.23%,
- 10-year U.S. Treasury 4.380 up 0.096 points or 0.762%,
- USD index $104.31 up $0.34 or 0.32%,
- Bitcoin $69,204 down $1,460 or 2.11%, (24 Hours)
- Baker Hughes Rig Count: U.S. unchanged at 585 Canada -3 to 213
U.S. Rig Count is down 33 rigs from last year’s count of 618 with oil rigs down 17, gas rigs down 16 and miscellaneous rigs unchanged.
*Stock data, cryptocurrency, and commodity prices at the market closing
Today’s Highlights
US stocks rebounded on Friday as investors processed a disappointing jobs report and positive earnings from major tech companies. The economy added only 12,000 jobs in October, falling significantly short of expectations. Amazon shares surged over 6% after reporting strong earnings and triple-digit revenue growth in its cloud unit’s AI business. Intel stock jumped more than 3% following better-than-expected Q3 revenue and a positive Q4 forecast. Apple shares declined slightly due to weaker-than-expected Q4 service revenue and China revenue. The positive earnings from Amazon and Intel helped alleviate concerns about Big Tech’s prospects. The jobs report is the last major economic data before the Fed’s policy decision on November 7. Market expectations for the upcoming meeting remained largely unchanged, with traders estimating a 99% probability of a quarter-point interest rate reduction. Despite Friday’s recovery, all three major indexes were on track to register losses for the week.
Today’s Economic Releases Compiled by Steven Hansen, Publisher:
The October 2024 Jobs report was bad. Payroll employment increased by only 12,000 and the unemployment rate unchanged at 4.1%. Part of the reason the unemployment rate was unchanged is that the household survey (which provides the headline unemployment rate) reduced the size of the workforce by 220,000, lowered the amount of employed by 368,000, and then removed 428,000 from the workforce. Remember the household survey is a poll of 60,000 households done monthly by the BLS. Note that the Establishment Survey produces the headline 12,000 jobs growth which is totally inconsistent with Household Surveys employment decline of 368,000. The October 2024 BLS jobs report was weak due to several key factors:
- Hurricane impacts: Hurricanes Helene and Milton affected employment, particularly in Florida and North Carolina, though the exact impact was difficult to quantify.
- Boeing strike: A significant labor strike at Boeing resulted in approximately 44,000 job losses in the manufacturing sector.
- Downward revisions: Previous months’ job figures were revised downward significantly. August’s numbers were adjusted from 159,000 to just 78,000, while September’s were revised from 254,000 to 223,000. This resulted in a total downward revision of 112,000 jobs
- Broad-based weakness: Several sectors experienced job losses or minimal growth:
- Manufacturing shed 46,000 jobs
- Temporary help services lost 49,000 jobs
- Leisure and hospitality declined by 4,000 jobs
- Retail trade and transportation/warehousing also reported slight losses
- Slower overall trend: Even before October, job creation in 2024 had been averaging about 200,000 per month, which was already about 60,000 less than the same period in 2023.
- Economic deceleration: The weak report may indicate a broader economic slowdown, with some pundits blaming the Federal Reserve’s interest rate hikes aimed at controlling inflation.
While some of these factors, like the hurricanes and the Boeing strike, are temporary, the broad-based weakness across sectors and the significant downward revisions to previous months could suggest underlying softness in the job market. Honestly, raising the federal funds rate has little to do with the soft numbers as there was a lot of money available. Goods production is escaping the high cost of doing business in the US with imports rising and domestic production falling. In addition, the Bureau of Labor Statistics (BLS) does not explicitly count or exclude unauthorized immigrants in its employment surveys. However, the household survey, which is part of the BLS jobs report, does include unauthorized immigrants in its data collection. With over 10 million illegals in the country recently – how does this affect the jobs report data?
Construction spending during September 2024 was 4.6% above the September 2023 (down from 4.8% last month). Spending on private construction was up 3.8% year-over-year (up from 3.7% last month) and spending on public construction was up 7.0% year-over-year (down from 8.5% last month). Construction spending is one of the bright spots in the economy but growth has been declining in 2024.
The ISM Manufacturing PMI® registered 46.5% in October 2024, 0.7 percentage point lower compared to the 47.2 percent recorded in September. This is the lowest Manufacturing PMI reading in 2024. The overall economy continued in expansion for the 54th month after one month of contraction in April 2020. (A Manufacturing PMI above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index remained in contraction territory, registering 47.1 percent, 1 percentage point higher than the 46.1 percent recorded in September. Manufacturing contraction is accelerating and pretty soon made in USA labels will be hard to find.
Here is a summary of headlines we are reading today:
- Interest Rates and Weak Demand Cloud European Steel Market
- U.S. Drilling Activity Going Nowhere Baker Hughes Data Shows
- Exxon Completes Sale of French Refinery to Trafigura-Led Buyer
- Oil Markets on Edge After a Volatile Week
- A Mixed Earnings Season for Oil and Gas Giants
- Stocks climb to start November as traders look past weak jobs report: Live updates
- Here’s where the jobs are for October 2024 – in one chart
- IRS announces 401(k) contribution limits for 2025
- Election next week holds big implications for stock market, especially the control of Congress
- Super Micro’s 44% plunge this week wipes out stock’s gains for the year
- Bitcoin slips below $70,000 after notching 12% gain in October: CNBC Crypto World
- Record numbers of wealthy Americans are making plans to leave the U.S. after the election
- Amazon shares jump 7%, approach record after earnings beat
Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.