Benzinga - by Shanthi Rexaline, Benzinga Editor.
U.S. stocks look set to open higher in the final session of the trading week after a recovery attempt fell flat on Thursday. The September jobs report is likely to be the front and center as traders wait to make sense of the data’s implication for near-term monetary policy. An M&A rumor in the energy space could offer support to stocks in the sector, although a third straight session of losses for oil could keep sentiment in check.
The focus now shifts to the unfolding earnings season and the strength of corporate profit growth, which has in the past single-handedly lent support to the market. Pre-announcements from companies, therefore, assume importance.
Cues From Thursday's Trading:
Thursday, the major indices closed slightly lower, but well off the lows of the session, as traders moved to the sidelines ahead of the monthly non-farm payrolls report. The averages opened slightly lower but fell sharply till late-morning trading as jobless claims data and the Challenger monthly job cut report affirmed the tightness in the labor market.
Buying set in as traders took advantage of the oversold levels but the momentum was not strong enough to take the averages past the flat line. The beaten-down small-cap stocks, however, sneaked above the unchanged line by late afternoon trading.
Consumer staple and material stocks were among the worst decliners of the session, while some defensive and technology stocks gained some ground.
US Index Performance On Thursday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.12% | 13,219.83 |
| S&P 500 Index | -0.13% | 4,258.19 |
| Dow Industrials | -0.03% | 33,119.57 |
| Russell 2000 | +0.14% | 1,731.51 |
Analyst Color:
Despite the oversold nature of the stocks following the recent sell-off, the bottom isn’t yet there, according to fund manager Louis Navellier. “Technically the entire stock market has become oversold but has yet to find the buying-the-dip bottom,” he said.
Navellier said, “The AI theme appears to be fading fast outside of NVIDIA and the other mega techs.” He noted that consumer staples have pulled back to the low for the year and that the Dow Industrials and Russell 2000 indices are negative for the year.
The next catalyst is the upcoming earnings season, with the focus shifting to the holiday season outlook and the 2024 guidance, Navellier said. “Stepping in before earnings is a bit of a catching a falling knife after the last 2 weeks, but it’s likely that when a bounce comes it will be significant, especially if 3Q23 earnings and forward guidance are resilient into the seasonally strong 4th quarter,” he said.
“Adding to positions on the pullback in names with reasonable valuations, high-quality earnings, strong balance sheets, and a meaningful share repurchase program appears prudent in this oversold market,” he added.
Futures Today
Futures Performance On Friday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.36% |
| S&P 500 | +0.28% |
| Dow | +0.26% |
| R2K | +0.37% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.31% to $425.81 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.35% to $359.95, according to Benzinga Pro data.
Upcoming Economic Data:
The Labor Department is due to release the September non-farm payrolls report at 8:30 a.m. EDT. Economists, on average, estimate a payroll gain of 170,000 for September compared to August’s job additions of 187,000. The unemployment rate is expected to tick down from 3.8% to 3.7%. The annual change in the average hourly earnings – an inflation measure, will likely remain unchanged at 4.3%.
The Fed speakers scheduled to make public appearances include:
- Dallas Fed President Lorie Logan at 9 a.m. EDT
- Fed Governor Christopher Waller at 12 p.m. EDT
Stocks In Focus:
- Tesla, Inc. (NASDAQ:TSLA) fell over 1% in premarket trading after the company reduced prices of its Model 3, Y EVs in the U.S.
- Levi Strauss & Co. (NYSE:LEVI) moved down about 2% following the release of its quarterly results.
- Pioneer Natural Resources Company (NYSE:PXD) jumped over 11% in reaction to a Wall Street Journal report that said the company is nearing a $60 billion deal to be bought by Exxon Mobil Corp. (NYSE:XOM).
Crude oil futures slipped 0.21% to $82.14 in early European session on Friday following Thursday’s 2.27% pullback.
Bond yields have resumed their climb, with the benchmark 10-year U.S. Treasury yield currently up 0.024 percentage points to 4.74%.
Among the global markets, Asian stocks settled mostly higher, led by the Hong Kong market, although the Japanese and New Zealand markets ended modestly lower. The Chinese market continued to remain closed.
Indian central bank, which met on Friday, kept its key rates unchanged, in line with expectations, with the Reserve Bank of India pointing to a resurgence in consumer spending.
The European markets were trading firm by late-morning trading on Friday even as traders in the region kept a cautious eye on the U.S. monthly jobs data.
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