Positive Jobs Report Boosting Markets

Positive Jobs Report Boosting Markets

Following months of trade disagreement with China and yet another interest rate cut from the Fed, the market enjoyed a strong opening bell this morning. 

According to Marketwatch.com, following a higher-than-expected jobs report for October, the Dow Jones Industrial Average started the month strong, opening at 27,185 this morning–up 138 points. The S&P 500–which has been showing record highs this week–gained 15 points and opened at 3,052.75, topping the intraday high it set earlier this week of 3,050.10. The Nasdaq Composite opened today at 8,329–up 35 points. 

According to a report issued by the Labor Department, 128,000 new jobs were created in October, trumping estimates made by economists who were only predicting an uptick of 75,000 jobs. However, the national unemployment rate has increased to 3.6, seeing 86,000 American’s now unemployed.

A report by CNBC shows that the industries with the most job growth in October included hospitality, healthcare, and business and financial services, while there was a significant drop in manufacturing jobs. However, insiders credit the drop in manufacturing to the GM strike. 

As expected, the Fed cut interest rates for the third time this year, lowering the rate by a quarter percent. The Fed has however hinted that it intends to pause rate cuts going forward. Members, including Fed Chair Jerome Powell are confident that the economy is going strong and while bolstered by strong consumer spending, outside factors including Brexit, global weakness, and the tariff war with China are certainly issues to keep a close eye.

While many stocks were soaring high this week, the news that Washington and Beijing may not have an interim trade deal in place anytime soon is surely a problem that investors are keeping a close eye on.

The Epoch Times reported the S&P’s record setting week can be attributed to the strong earnings reported by drug companies Merck and Pfizer–both seeing gains of 3 percent. According to Refinitiv, most companies in the S&P saw a strong third quarter with 77 percent of firms exceeding profit expectations.  

Alphabet–Google’s parent company–however did no favors for the Nasdaq, showing lower than expected profits with a drop of 2.1 percent for the quarter.  

Throughout the week, several companies took hits to their share prices. General Motors surpassed profit expectations and saw an increase of 5 percent, but due to the 40-day strike by the United Auto Workers union, the company has drastically lowered it’s 2019 earnings forecast. 

With an influx of competition, the popular online food delivery service GrubHub Inc. saw a staggering loss of 43 points. 

The popular vegan burger company Beyond Meat Inc. also took a hit, dropping 19 percent. Similar to GrubHub, an increase in competition from companies such as Impossible Foods is a likely culprit in the sudden drop. The lack of store discounts for their products is also an issue for the company that’s been soaring high for months.