Weaker-than-expected economic data out of China rattled Wall Street’s bulls late in the week. China’s exports fell 10% last month, signally the prospect of slow growth internationally with the possibility of it rubbing off here at home. Domestic economic data continues to be unimpressive, as well; although the labor market appears to be on the mend, but not overheating. And the rising dollar will make it more difficult for multi-nationals based in the U.S. to provide much lift. The start of earnings season got off on a negative note with Alcoa missing earnings expectations and lowering its revenue forecast and the shares dropped nearly 16%. But some of the major banks, including aggressive candidate JPMorgan Chase, posted stronger-than-anticipated profits.
After the dust cleared, the Dow Industrials fell 102 points for the week (0.6%), while the S&P 500 gave back about 1% and the NASDAQ 1.5%. Utilities and telecom stocks reversed their negative trend moving higher on average by about 1%. However, all other market sectors were in the red, led by healthcare, which fell nearly 3.5%. Even a slight uptick in oil prices wasn’t enough to give energy stocks any momentum, and the group was negative by about 1%.
Although the Federal Reserve will meet again just before the elections, it is unlikely we will see any action until December’s meeting, where a 0.25% rate hike is likely. Earnings season will heat up over the coming weeks, which will most likely spike volatility for the remainder of the month and into early November. This week we will hear from a number of blog choices including Intel, Johnson & Johnson, Schlumberger, Verizon and Danaher. The stock market is hanging in there moving back and forth within a trading range and finding difficulty getting out of its own way. Any sharp market pops are often followed by profit taking and the trend will likely continue for a while with earnings and Fed news ever-present wild cards.
Today’s Trivia Question: Virtually all Major League Baseball teams are privately held. Which team, however, is traded on the NASDAQ? Atlanta Braves, Minnesota Twins, Kansas City Royals or Arizona Diamondbacks.