Minyanville's T3 Morning Market Call: Market Looks to Rebound From First Monthly Loss Since May

By T3Live.com  OCT 26, 2012 9:50 AM

Facebook, Visa, and Netflix are in the news today.


US stock futures are slightly higher Thursday morning after encouraging employment data. ADP reported that the economy added 158,000 private sector jobs last month, while new jobless claims fell 9,000 to 363,000. The market closed out October yesterday with its first monthly loss since May, and traders will be looking to see if stocks can get a lift heading into the Holiday season.

As today is the first day of a new month, at 10 a.m. EDT we will get the ISM Manufacturing Survey results. Analysts expect the number to fall to 50.5% from 51.5% last month, which would still indicate expansion, but at a lower rate. Consumer confidence will be also be released at 10 a.m. EDT today; it was supposed to come out on Tuesday, but was postponed due to Superstorm Sandy.

Market volume was light Wednesday as New York City and surrounding areas continue to work to clean up the mess left by the storm. Lower Manhattan remains flooded, with only a partial re-opening of the subway system happening today. With no public transportation, a steady stream of commuters can be seen walking to work over bridges as the roads are gridlocked. Below 40th Street in Manhattan, electricity is still likely a few days away.

Netflix (NASDAQ:NFLX) will continue to be in focus after yesterday’s revelation that Carl Icahn is taking a 5.4 million share stake in the company. Icahn, who failed with his Blockbuster investment some years ago, is taking another stab at the video rental business, albeit one with a slightly modernized business plan. NFLX rose nearly 14% yesterday, but is down 2.5% this morning pre-market.

Visa (NYSE:V) is up more than 2% pre-market after last night reporting better-than-expected earnings and a share buyback program. The credit card stocks have been a source of steady strength in the market this year, and there does not appear to be any reason to believe it will not continue to perform well after Visa’s report.

Facebook (NASDAQ:FB) has now given back the majority of its large earnings gap after falling more than 4% yesterday. The company reported a nearly 40% jump in advertising revenue in its quarterly report, but investors have taken that spike as an opportunity to unload some of their stock. Yesterday, an extended IPO share lock-up expired, leading some early investors to sell shares into the open market. Traders will be watching to see if FB fills the entire gap, or rebounds from yesterday’s drop.

No positions in stocks mentioned.