FRIDAY – Stocks traded lower on Friday amid weak overseas data, but remained on track to post solid weekly gains after the release of better-than-expected earnings.
The Dow Jones Industrial Average traded 97 points lower, or 0.4%. The S&P 500 pulled back 0.3% while the Nasdaq Composite declined by 0.5%.
More than 70 S&P 500 companies have reported calendar third-quarter earnings this week. Of those companies, 81% have posted better-than-expected results, FactSet data shows.
Weak data from China weighed down the market on Friday.
Still, concerns over the state of the global economy lingered. Overnight, China posted its weakest growth in nearly three decades, as the U.S.-China trade war hit demand at home and abroad. The world’s second-largest economy grew 6% in the third quarter, less than expected, and its weakest pace of expansion in over 27 years.
Sentiment around U.S.-China trade talks improved slightly this week, however. Larry Kudlow, director of the National Economic Council, told CNBC’s “Squawk Box” on Thursday there is “a lot of momentum” to get a deal done.
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THURSDAY – U.S. stock index futures rose Thursday after a draft Brexit deal was struck between the European Union and the U.K.
Around 7:40 a.m. ET, Dow Jones Industrial Average futures were up 82 points, indicating a gain of about 70 points at the open. Prior to the Brexit reports, futures had been trading flat to lower. Futures on the S&P 500 and Nasdaq 100 were also higher.
U.K. Prime Minister Boris Johnson said “we have a great new Brexit deal” via Twitter. He called on British lawmakers to back the deal when it’s put before Parliament on Saturday. Meanwhile, European Commission President Jean-Claude Juncker tweeted that the deal was a “fair and balanced” one.
Nonetheless, markets rallied on the Brexit reports, as the deal removed some investor uncertainty amid heightened concerns about the health of the global economy. On Wednesday, unexpectedly weak U.S. retail sales data fueled fears about a possible recession.
Global economic data points to slower growth, while the U.S. manufacturing sector is already contracting. Among the greatest of the worries plaguing markets is the ongoing U.S.-China trade war.
The latest weekly jobless claims figures, housing starts and building permits for September, and the Philadelphia Federal Reserve’s manufacturing index for October will be released at 8:30 a.m. ET. Industrial production data for September will follow slightly later in the session.
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FRIDAY – U.S. stock index futures rose on Friday, erasing an earlier decline after the release of the latest U.S. jobs report.
The U.S. economy added 136,000 jobs in September, the Bureau of Labor Statistics said Friday. Economists polled by Dow Jones expected an increase of 145,000 jobs. The unemployment rate fell to 3.5%, a 50-year low, but wages grew at a slower-than-expected pace last month.
Treasury yields briefly jumped before giving back those gains. The 10-year yield last traded at 1.53% after hitting 1.55%.
Wall Street will be watching speeches by Fed officials later in the day, including Boston Fed President Eric Rosengren.
came into Friday’s session on pace to record large losses for the week.
The Dow was down 2.3% through Thursday’s close while the S&P 500
had lost 1.7%. The Nasdaq was down 0.9% week to date.
Those weekly losses came after a dismal U.S. manufacturing data report sparked fears of a potential recession in the U.S. Between Tuesday and Wednesday, the Dow lost more than 800 points.
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U.S. stocks rose on Tuesday as Wall Street kicked off the final quarter of 2019.
Wall Street ended higher on Monday on the back of renewed optimism in U.S.-China trade talks. A spokeswoman for the U.S. Treasury said the White House “is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time.” This relieved some earlier fears raised by reports last week that the U.S. has been looking at restricting U.S. investments in China.
Trade delegations from China and the U.S. are set to resume trade talks next week.
Furthermore, traders are looking to hear from the World Trade Organization. The institution is set to decide on an aircraft subsidies dispute that could allow the U.S. to impose tariffs on Europe.
On the data front, manufacturing Purchasing Managers’ Index numbers will be released at 9:45 a.m. ET; construction spending figures will be out at 10 a.m. ET, as well as the Dallas Federal Reserve service-sector numbers.
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