While “Mag Seven” names have had amazing coattails since the rally began in October 2022, they also have the same coattails on days like yesterday.

Even advancing sectors (Energy (XLE) and Utilities (XLU)) endured ugly internals, as market breadth was bearish for the session.

Still Winning

Although the S&P 500 turned negative on the last day of the month, this remains the best presidential election year market in history.

However, the index closed right at the 50-day moving average, and the inability to hold could lead to increased volatility. The Relative Strength Index (RSI) suggests potentially more near-term downside, and the Rate of Change (ROC) has begun to swoon.

Vanishing Swagger

Two days ago, the market was in the ‘Greed Zone’ and even deeper a week and a month earlier (briefly touching into ‘Extreme Greed’ in September).

Now, it's neutral and looking for the next source of confidence.

Retail Investor Confidence

Retail investors have been bullish throughout the rally, but that optimism has waned slightly. The latest survey of the American Association of Individual Investors (AAll) saw bullishness limp out of October, almost 10% points lower than at the start of the month.

On the other hand, bearishness heads into November more than 10% points higher than it was in October.

“Mag Seven” Latest Reports

Amazon (AMZN) beat the Street on revenue, earnings, operating margin, and North American sales. The high-end fourth-quarter revenue guidance of $188.5 billion is above the Wall Street consensus of $186.36 billion. These numbers are a sight to behold and comprehend.

Apple (AAPL) posted solid numbers, but there is a red flag regarding China's sales and market share.

Jobs Report

There will be much confusion over this morning's jobs report but watch for wages and weekly hours. This weakness is overlooked and underreported, making the sting of inflation more acute.

Today’s Session

• 12,000; consensus 100,000
• September revised to +223,000 from +254,000
• August revised to +78,000 from +159,000

Breakdown of jobs shows weakness in manufacturing (Boeing (BA) strike) and professional bus services (weather related).

The unemployment rate stayed steady in a month that was heavily affected by Hurricanes.

Average hourly earnings gained 0.4% in October, surpassing consensus of 0.3%. September’s number was revised down to +0.3% from +0.4%.  This indicates the headline number is not as strong as the beat suggest.

The two-year yield initial reaction to the jobs report was sharply lower. It was a downside surprise as the expectations for the NFP figure were much higher. Overall, the data suggests the economy is solid.

Tweet

 

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