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T3's Take 3: Stocks Enter Holding Pattern Ahead of October NFP Report


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

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Economic Data

Today saw a few economic data releases ahead of tomorrow's eagerly-awaited October nonfarm payrolls report.

Initial jobless claims came in at 276,000, which was worse than the 262,200 consensus. Continuing claims rose to 2.163 million.

Nonfarm productivity rose 1.6% in the third quarter, well ahead of the 0.3% decline economists had forecast. 

And unit labor costs rose 1.4%, which was under the 2.5% gain expected.

Overseas, the Bank of England left its interest rate policy unchanged, as expected. Governor Mark Carney took a surprisingly dovish turn at the subsequent press conference due to global economic pressures, which forced the bank to lower its inflation and growth forecasts.

That send the British pound sharply lower today.

Big Tech Earnings

Facebook (FB) hit a new all-time high of $110.65 this morning after reporting third-quarter earnings after the close yesterday. The company earned $0.57 per share, beating estimates by $0.05. The company also exceded revenue forecasts.  

Investors were impressed by the company's 73% growth in mobile ad revenue, which accounted for 78% of total advertising revenue.

Facebook shares are now up 39.4% year-to-date.

Qualcomm (QCOM) beat Wall Street's expectations on both the top and bottom lines.

However, the stock collapsed today with a 15.3% drop down to $51.07.

Qualcomm expects to earn $0.80-$0.90 per share next quarter, which was well below the $1.08 consensus. Revenue guidance was also underwhelming.

Qualcomm is suffering from difficult conditions in China, as well as a broader slowdown in the smartphone market.  

US Markets

The S&P 500 entered a holding pattern ahead of tomorrow's big NFP report.

The index fell 0.1%, while the NASDAQ Composite dropped 0.3% on weakness in semiconductor stocks, including the aforementioned Qualcomm. Biotechnology also weighed on the NASDAQ.

Energy stocks continued giving back Tuesday's big rally as crude oil slid 2.2%.

Financial stocks were strong today, which could be the result of traders anticipating strong jobs numbers tomorrow. A big beat would support a Fed rate hike, which would boost banks' profit margins.

The Financial Select SPDR (XLF) rose 0.4%, making it the best performing major sector ETF.

Friday Preview

The big news tomorrow will be the October NFP report, which could give clues as to whether the Fed will hike rates in December. Economists are predicting a gain of 184,000 jobs, with an unemployment rate of 5.0%.

Canada will also deliver its October jobs numbers tomorrow morning.

In earnings, Berkshire Hathaway (BRK.B) reports after the close.
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