Minyanville's Market Recap: FOMC Rally! Markets End Higher!
All eyes were watching the Fed today. Markets rallied as the Fed cut rates! Stocks end higher!
Investors had plenty to digest with the day's economic events. Economic data from the Commerce Department helped set a positive tone this morning with GDP figures for the third quarter coming in at +3.9% above the Street's expectations of +3.1%. The employment cost index, which helps economists gauge shifting employment between industries and insight into benefit costs, rose +0.8% versus +0.9% consensus.
In other parts, Chicago PMI came in less than expected at 49.7 versus estimates of 53.0, and construction spending increased +0.3% versus -0.4% consensus.
Nonetheless, the deal was sealed with a unanimous 9-1 vote by the Federal Open Market Committee to cut the Fed funds and discount rate by 25 basis points to 4.5% and 5.0% respectively. Prior to the release, Toddo noted on the Buzz the first move afterward was typically the false move. After an initial sell-off stocks experienced a broad-based rally. Financials performed well with the Philadelphia Bank Index (KBW) adding +0.58%. JPMorgan (JPM) added +0.95%, Lehman Brothers (LEH) added +3.23%, and Merrill Lynch (MER) added +1.24%. Goldman Sachs (GS) led the financials briefly touching above the $250 level to settle in for a +3.16% gain. Get more insight from Toddo in his Random Thoughts.
Not all sectors received the same treatment. Homebuilders fell sharply after the release likely due to economic expansion slowing in the near term likely due to "intensification of the housing correction." Notable performances included Lennar (LEN) down -7.5%, Beazer Homes (BZH) down -6.8%, and Hovnanian (HOV) down -7.3%. For more on the housing sector read Professor Depew's Five Things You Need To Know and Professor Linden's An Underappreciated Housing Number.
In commodities news, crude oil surged to 95.01 in after-hours trading. Metals were strong as well. Gold added +7.2 to 791.50, Copper added +0.007 to 3.48145, and silver added +0.148 to 14.415. Copper was a laggard for much of the day but managed to settle up +0.007 to 3.4815.
In after hours Crocs (CROX) reported 3Q $0.66 EPS versus $0.63 consensus; revenues rose 130% to $256.3 mln versus $258.5 mln consensus. CROX stated earnings would be in the range of $1.94-1.98 versus $1.97 consensus, but revenues were expected to come in slightly lower in the range of $820-830 mln versus $835.67 consensus. CROX was trading as low as -15.50% to $60.89.
JDS Uniphase (JDSU) reported $0.08 EPS versus $0.06 consensus on revenues of $357.2 mln versus $355.8 consensus.
For more summaries click on Minyanville's Buzz Bits and Professor Tuttle's Winner's & Sinners.
Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.
Some bullish trade or investment ideas: MA, NSTK, AEZ, BLK, SCHW, NTCT, NTGR, GOOG, GS, BMY, EPAY, ARTW
Some bearish trade or investment ideas: DECK, MA, RTI, XLE, WSTK, CTIC, DXY, SLB
Trick or Treat! Happy Halloween! Have a great night!
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