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The Wall Street Friday Rally
Wall Street staged a comeback on Friday, ending a two-day downturn thanks to strong performances from major companies. This rally came despite a mixed bag of economic news, including a weaker-than-expected jobs report and rising oil prices.
Earnings Surpass Expectations: Tech Giants Lead the Charge
Tech giants like Amazon and Intel led the market higher after exceeding expectations in their earnings reports. Amazon surged 6.5% on strong results, while Intel jumped 8.5% on a bullish outlook. This helped to offset a slight decline for Apple.
Economic Indicators: Jobs Report and Oil Prices
The energy sector also provided a boost, with Exxon Mobil and Chevron exceeding profit, output, and sales estimates. Additionally, optimism surrounding a potential resolution to the Boeing strike lifted the company’s stock price by 3.5%.
The October jobs report showed the slowest pace of hiring since 2020, but analysts remained cautious due to distortions caused by hurricanes and a major strike. The report, the last major economic data point before the Federal Reserve’s meeting next week, fuelled speculation about potential rate cuts.
For the week, the S&P slipped -1.4%, while the Nasdaq Composite slid -1.5%. The Dow fell -0.2%.
Here are the closing levels on Friday
| DOW JONES | 42052.19 | +288.73 | +0.69% |
| S&P 500 | 5728.80 | +23.35 | +0.41% |
| NASDAQ Comp | 18239.92 | +144.77 | +0.80% |
| US 10 Y | 4.38% | ||
| VIX | 20.33 | +1.25 | +6.55% |
There are a lot of theories on the moves we saw last week.
Month end rebalancing, election polls, and of course mixed results from big tech.
The early rally on Friday looked like the buyers trying to take back control but unfortunately the market succumbed to late selling into the close. The positive take away was that the market closed up for the day and the S&P above its 50-day moving average.
If it weren’t for the Elections on Tuesday and the Fed meeting after that, the S&P looks like it may be heading lower. However, anything can happen with the elections and for the Fed the most likely outcome is a 25-basis point cut. Market will be looking for clues of where they go next in the statement that follows.
All one can safely say is that there is going to be wild swings in the market this week, especially during the vote counting.
So, it’s useless to try and predict where the market will be. We just got to be patient and be ready to react which ever way.
Source: CBOE, Bloomberg
