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Stocks Hit New Highs on NFP Data, Gold Has a Day in the Sun


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


The S&P 500 (SPX) hit a new all-time for the second day in a row following the release of the solid October jobs report.

The Bureau of Labor Statistics said nonfarm payrolls rose by 214,000 last month, which missed the 235,000 consensus forecast. However, August and September's figures were revised up by a total of 31,000.

The unemployment rate fell to 5.8%, which was just below the 5.9% Wall Street was expecting. Additionally, the labor force participation rate rose to 62.8%.

Average hourly earnings rose 2.0% year-over-year, which was just shy of the 2.1% consensus.

The report wasn't weak enough to induce panic among market participants, yet it wasn't strong enough to move the needle in terms of monetary tightening expectations.

There was a brief spate of volatility following the 8:30 a.m. ET release, but the S&P managed to creep higher to hit its new record high of 2034.26. Thereafter, stocks traded sideways and the S&P finished at 2031.83, up less than a point for the day.

The Dow Jones Industrial Average (DJI) set its own record high at 17,575.33.

In international news, Ukraine accused Russia of sending dozens of tanks into eastern Ukraine.

Meanwhile, Russia's central bank issued a statement saying that its down trending Ruble was undervalued, and that interventions to support the currency would be forthcoming. The news pushed the Ruble up off its overnight lows, though the Russian MICEX Index was flat on the day.

Gold finally had a good day, trading up over 2% as the US dollar turned lower. The Market Vectors Junior Gold Miners ETF (GDXJ), which fell over 50% from July 10 to early November 5, plowed 11.3% higher.

The dollar weakness also helped pushed oil prices higher, and US energy stocks traded sharply higher. The Energy sector was by far the best performing major market sector, and the Energy Select Sector SPDR Fund (XLE) rose 1.1%.

The 10-Year US Treasury yield fell 6 bps to 2.312%, lending support to housing and utility stocks.

Health care stocks, including biotech names, were the worst performers today. The US Supreme Court agreed to hear a case challenging the federal government's ability to provide insurance tax credits through the Affordable Care Act. Theoretically, it the suit is successful, demand for pharmaceuticals and health care services would decrease.

Since health care stocks have performed so well this year, traders took the news as a reason to take some profits.

Airline stocks also had traders taking profits today, courtesy of the spike in oil.

Tomorrow's Financial Outlook

There is are no US economic data reports on the calendar for Monday. Overseas, China will announce its October New Yuan Loans and CPI reports Monday.

In earnings, we'll see results from 3D Systems (DDD), Dean Foods (DF), Caesar's Entertainment (CZR), and Rackspace (RAX), among many others.

Trading could be impacted by the news flow out of Ukraine, as well as developments regarding central bank interventions around the world.

Twitter: @Minyanville

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No positions in stocks mentioned.

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