Stock Market Today: October 2nd - 6th

Welcome Stockaholics to the trading week of October 2nd!

Bullish start to fourth quarter will get test in sluggish economic data

• Stocks start the fourth quarter at all-time highs for the S&P 500, Nasdaq and Russell 2000, after a solid performance in the third quarter.
• Jobs data and vehicle sales are among the many economic reports that are expected to be affected by hurricanes Harvey and Irma.
• About a dozen Fed speeches will get market attention in the week ahead, as traders watch for clues on interest rates.

Stocks start the fourth quarter on bullish footing in the coming week, with several major indices at all-time highs.

"Historically, the first few days of a new month are strong. With everything closing at highs, and the stock market not having the bad September everyone expected, it does bode well for the week ahead," said Scott Redler, partner with T3Live.com.

Hurricanes Harvey and Irma are expected to have muddied most economic reports in the coming week, giving a boost to car sales Tuesday but hurting Friday's September jobs report. Traders are also watching for warnings from companies that may have suffered hits to sales and profits, due to the storms.

Besides a heavy calendar of economic news, Federal Reserve officials should dominate the headlines with about a dozen Fed speaker appearances. Fed Chair Janet Yellen gives introductory remarks at a banking conference Wednesday.

But market focus may shift to comments Tuesday and Thursday from Fed Gov. Jerome Powell, one of several candidates reported to be interviewed by President Donald Trump as a replacement for Yellen.

The big data for the week is September's employment report, expected to show that less than 100,000 nonfarm payrolls were added, down sharply from 156,000 in August.

"It's going to make the Fed's job even that much harder. All this data is being blown about by the storm impact. The jobs number is going to be a nonevent even if it's as weak as people are saying it is," said Win Thin, senior currency strategist at Brown Brothers Harriman.

Vehicle sales, reported Tuesday, are expected to bounce back from a recently slower pace as residents of areas hit by wind and floods replace damaged cars and pickup trucks.

"Recognizing that the data is going to be very choppy and noisy in the interim, and as a result of that it's going to be really hard to get clear signals," said Mark Cabana, head of U.S. short rate strategy at Bank of America Merrill Lynch. "Our economists are expecting 17.6 million (annualized vehicle) sales, which is an increase from the prior 16 million."




Stocks finished the end of the third quarter with solid gains, and the S&P 500, Nasdaq and Russell 2000 were at all-time highs. The S&P rose to 2,518, up 0.7 percent for the week and a 3.9 percent gain for the quarter. Nasdaq was up 5.8 percent for the quarter to 6,495, and the Russell was up 5.3 percent for the quarter at 1,491. The Dow was up 4.9 percent for the quarter but off its high at 22,400.

Strategists say the fourth quarter could also be bullish for stocks, which defied all expectations for a correction during the late summer. The Republican tax plan could keep the market buoyed, though some analysts say if there is disagreement over the plan, it could trigger a slight pullback.

"Earnings season will start in the week after, and that's when things should get a little more volatile. We had a broad-based rally that had leadership from banks, small-caps and even tech that got beaten up had a potent rebound," said Redler. "There's not really too many holes in the tape for now."

Bond yields edged higher in the final days of the third quarter, but the 10-year Treasury note, yielding 2.33 percent, was only slightly higher than the 2.30 percent it was at on June 30.

Michael Schumacher, director of rate strategy at Wells Fargo, is among those who say the Treasury market may have hit a turning point toward higher yields in the past week, as the Fed re-emphasized plans to hike interest rates and the much-anticipated tax plan was unveiled.

Schumacher said he will now be watching the Fed speakers because the economic data is too murky due to the hurricanes.

"At least until December, the data is a mess. I think you listen more to the policymakers and focus less on the data. ... If you see fine-tuning of the reading the Fed wants to give the markets, I would guess it's somewhat hawkish," he said.


This past week saw the following moves in the S&P:



Major Indices End of Week:



Bird's Eye view of the Major Futures Markets on Friday:



Economic Calendar for the Week Ahead:



Sector Performance WTD, MTD, YTD:








Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD thus far in 2017-



Here are the current pullback/correction levels for the major indices as of this week ending-



Here are the most notable earnings releases calendar due out for this upcoming week ahead:
($COST $LEN $PAYX $PEP $STZ $MON $CALM $AZZ $AYI $CAFD $RPM $LW $YUMC $ISCA $NG $HELE $RECN $TMQ)



ShadowTrader Video Weekly 9.24.17 - Market overview coming into Q4
Video from ShadowTrader Peter Reznicek



Have a wonderful trading week ahead on this first trading week of the month of October and of Q4 everyone!

 

Here Comes the Fourth Quarter
Posted by lplresearch

Hard to believe it, but the fourth quarter starts next week! Per Ryan Detrick, Senior Market Strategist, “History has shown that the fourth quarter has frequently been kind to equities, as it includes the usually strong and feel-good months of November and December.” Since 1950, the S&P 500 Index has gained +3.9% on average and is higher 79.1% of the time, making it the strongest quarter of the year.



To break it down a little more, September is known as the worst month of the year on average; but given the fact the S&P 500 has made multiple new all-time highs this year, 2017 bucks that trend. As the table below shows, the index has been up 5.2% on average in the fourth quarter when it makes a new all-time high in September. Taking things a step further, when the S&P 500 is up more than 10% year to date heading into the fourth quarter, and it makes a new high in September (like in 2017), the returns have been even better—up 5.9% on average, boasting positive returns 11 out of 12 years.



Although we aren’t looking for a 6% jump in equities in the fourth quarter, this study suggests that the chances of a major sell-off are rather slim. In fact, should any type of a pullback occur in the fourth quarter, we would view it as a buying opportunity.

October just mid-pack in post-election years

Post-election year October’s are neither great nor bad since 1953, ranking mid-pack across DJIA, S&P 500, NASDAQ and Russell 1000 with gains averaging from 0.7% (DJIA) to 1.2% (NASDAQ). DJIA has the best historical odds for gains having advanced in 11 of the last 16 post-election year Octobers. Despite the best average gain, NASDAQ actually has the worst record, declining in 6 of the last 11 post-election year Octobers. A 12.8% gain in 2001 boosts its average. Should a meaningful decline materialize in October it is likely to be an excellent buying opportunity, especially for any depressed technology and small-cap shares.

Positive Worst Six Months Good Omen

A big upside move of over a 5% gain on the S&P 500 during the Worst Six Months (or the “Sell in May” period) from May through October has been followed by great gains for both frequency and magnitude. There is just one month left in the Worst Six Months. So if the market can log further gains in October and not succumb to often self-fulfilling prophecy of Octoberphobia and the curse of the 7th year that would be a solid indication for stronger gains over the next Best Six Months (November to April) and 2018.

We currently sit at +5.3% for the S&P 500 since the close of April 2017. Not bad, but not great, and right on the cusp of the level of Worst-Six-Months gains the have been more often followed by big upside moves. Look at the two tables below of “Not Bad” and “Great” Worst Six Months. Great was both followed by better Best Six Months returns than the Not Bad years.

 

GLTA this week and I hope everyone has a great trading month of Oct. and Q4!

 

i hope everyone had a great first trading week of october and q4!

the markets sure aren't following what is typically seen during this time of the year

october is notoriously known as the most volatile trading month out of the entire trading year ... but it's been anything but volatile in this first week in

in fact, the vix (cboe volatility index) had registered its lowest "closing print" (9.19) on record yesterday!

thus far with this first week of oct. has been up up and away! {insert kool-aid man smiley here}

unless things fall apart (and quick) it looks like we can throw away the seasonal patterns this year.