Risk-Off Returns for the Stock Market

By Minyanville Staff Nov 02, 2012 4:38 pm

Today's financial recap and tomorrow's financial outlook.

MINYANVILLE ORIGINAL The monthly nonfarm payrolls were much better than expected and the prior month's figures were revised higher. However, the market rejected this good data and sold off sharply after a quick pop pre-market. US equity indices finished the day more than 1% lower, notably lower for the economically sensitive Russell 2000. Later in the morning, the monthly factory orders rose 4.8% from last month's decline of -5.1%, but this increase was expected as durable goods orders report earlier this week showed a similar increase.

Notable underperformance came from the commodities sector. Gold struggled on partial expectations of decreased monetary stimulus and lack of inflation. This was also effected by the stronger dollar, due to a strengthening US economy.

This morning in earnings, Chevron (NYSE:CVX) missed both earnings-per-share and revenue estimates, noting the adverse effect of global currency conditions. McGraw-Hill (NYSE:MHP) also beat earnings and guided higher on future earnings, after noting an increased demand for credit ratings.

Tomorrow's Financial Outlook

Over the weekend, G-20 finance ministers will meet in Mexico City to discuss the European debt crisis and plans for a banking union and Spain taking advantage of the European bailout fund, the ESM.

Monday in US economic data, the ISM will release its non-manufacturing composite index. Because the US is largely a services-based economy, this index is more important than some of the manufacturing data we receive. Economists estimate that the index will fall to 54.5 from last month's 55.1. Globally, Australia will release retail sales and the UK will release their services PMI index.

Earnings wise, Time Warner Cable (NYSE:TWC), Tesla Motors (NASDAQ:TSLA), Express Scripts (NASDAQ:ESRX), CF Industries (NYSE:CF), Zillow (NYSE:Z), and Walter Energy (NYSE:WLT) will report.

In a non-financial related note, US clocks will fall back an hour as Daylight Savings Time ends on Sunday.

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