Wall Street Strategies
Hello! Sign in or Register


Afternoon Note

Huge Reversal

By Charles Payne, CEO & Principal Analyst
10/3/2019 1:19 PM

The ISM non-manufacturing survey missed expectations, dropping four points from August to a reading of 52.6 and well below consensus of 55.3. The service sector is still expanding – a reading above 50 percent indicates the sector is expanding – but the numbers were the lowest since August 2016.

Percentage Point Moves

 ISM Non-Manufacturing Index

While the report was a disappointment, the market is now cheering for more rate cuts ahead.  Odds are 90% for a rate cut at the end of October, and 50% now for December.  And while this is great for stocks, U.S. Treasury yields have continued to go down with the 10 year now at 1.534% and the 2 year down to 1.386%. 

The market dropped fast on the release of the ISM services/non-manufacturing report but has since had a huge reversal. At the lows:

Now:

FAANG stocks have been hit hard of late, but Facebook (FB) is helping to reversing the trend on the announcement of the camera/messaging app through Instagram.  FB is higher by 2.4%.  Snap (SNAP), however, is getting hit on the news and is down over 5%. 

S&P 500 Index

+0.54%

 

Communication Services (XLC)

+0.71%

 

Consumer Discretionary (XLY)

                                                

-0.04%

Consumer Staples (XLP)

+0.97%

 

Energy (XLE)

+0.39%

 

Financials (XLF)

 

-0.26%

Health Care (XLV)

+0.59%

 

Industrials (XLI)

+0.04%

 

Materials (XLB)

 

-0.11%

Real Estate (XLRE)

+0.95%

 

Technology (XLK)

+0.91%

 

Utilities (XLU)

+0.09%

 
 

Factory orders for August were down 0.1%, compared to an increase of 1.4% in July.  Shipments were also lower by 0.1% after dropping 0.3% in July.  Business spending slowed in August once again.


 

Add Your Comment


Submitted comments are subject to moderation before posting.


Home | Products & Services | Education | In The Media | Help | About Us |
Disclaimer | Privacy Policy | Terms of Use |
All Rights Reserved.