What a week! – Here’s what traders are focusing right now…

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Stock Market Update Sunday, October 6th, 2019

Stocks went on a roller coaster ride last week!

Monday was pretty uneventful. Stocks opened higher and finished the day with small gains.

But then things started to get a little crazy on Tuesday.

Stocks were up at the open. But after the worst ISM Manufacturing PMI report in 10 years, stocks reversed their direction and ended the day at session lows.

And Wednesday was even worse.

After weak data in Europe and a lower than expected ADP Non-Farm jobs number, stocks tumbled even more.

On Thursday, stocks dropped again after more weak data. Although it wasn’t as bad as Tuesday’s manufacturing report, the ISM Non-Manufacturing index dropped to 52.6 (vs. a 55.4 forecast), which is the lowest reading in more than 3 years.

The S&P was down as much as 1.1% after the report. But stocks reversed direction after bad news turned to good news. With the weaker than expected data this week, traders saw the drop as an opportunity, hoping that the weak data would encourage the Fed to step in and lower rates.

Then on Friday, stocks rallied again after the September Jobs Report. Stocks finished near session highs and the S&P had its best day of the week with a 1.4% gain.

Stocks ended the week mixed, but it could have been a lot worse. At one point the S&P was down more than 3.5%. But by Friday’s close, the S&P was down just 0.3%. And the NASDAQ managed to end the week positive.

Here’s what traders were focused on:

  • Weak Data – Investors are concerned about an economic slowdown and the possibility of a recession. And it was weak data, and the reality that we are in a slowdown, that prompted last week’s sell-off. 
  • The Fed – The biggest reason for the end of week rebound was the Fed. Traders are hoping that the Fed will decide to cut rates (usually a good thing for stocks) because of the weak data.
  • Jobs Report – September’s report showed that 136,000 jobs were added (vs. a 150,000 forecast), the Unemployment Rate came in at a 50-year low at 3.5% (vs. a 3.7% forecast), and average hourly earnings were unchanged. Traders referred to the report as a “Goldilock’s report”…good enough to calm recession fears, but bad enough for the Fed to still consider cuts.

Here’s where the major indices ended the week:

  • The S&P finished with a 0.3% loss. Down 10 points, the S&P ended at 2,952.
  • The DOW ended lower by 0.9%. Dropping 247 points, the DOW closed at 26,574.
  • The NASDAQ was up 0.5%. With a 43 point gain, the NASDAQ finished at 7,982.

Crude Oil (CL) dipped below the $51 mark for the first time since August and ended with its 2nd losing week in a row. With a 5.6% loss, CL ended at $52.76 a barrel.

Apple (AAPL) had a great Friday after news that the company has asked suppliers to increase iPhone 11 production by 10%. The stock finished higher by 2.8% on Friday.

We’ve been covering the broker wars and their push to $0 commission all week long. Here’s where some of the major brokerages ended up last week:

TD Ameritrade (AMTD) -29.3%
Interactive Brokers (IBKR) -10.9%
Schwab (SCHW) -13.9%
E*Trade (ETFC) -15.9%

This upcoming week Fed Chair Powell will be in the spotlight. He is speaking Monday at 1pm ET, Tuesday at 1:50pm ET, and on Wednesday morning at 11:00am ET.

Here is the economic calendar for the week:

Real Time Economic Calendar provided by Investing.com.

This Stock Market Update was provided by Rockwell Trading Services LLC.

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