Hope you are all doing well. The big technology stocks that led major U.S. stock indexes higher the previous week reversed course, dragging the market lower. The NASDAQ bore the brunt of the sell-off and ended the week down 3%. The S&P 500 and the Dow fell 1.6% and 1.2%, respectively. Despite the week’s negative stock results, earnings growth has remained a positive catalyst for the market overall. Of the 91% of S&P 500 companies that had released third-quarter results as of Friday, 82% have exceeded analysts’ earnings forecasts. That earnings beat rate is the highest in 4 years. Soundgarden got inducted in the Rock and Roll Hall of Fame this weekend, I have broken down this week’s update using some of their songs and lyrics.
Fell on Black Days
The jobs data is supposed to help us see a good picture of the labor market. Unfortunately, the government shutdown has made us blind. The shutdown extended into its sixth week, meaning the absence of Friday’s monthly jobs release. Investors are in the dark about the state of the labor market. Nevertheless, a private release shed light on recent weakness, with the consulting firm Challenger, Gray & Christmas reporting that job cuts in October totaled 153,00. That is nearly three times the figure recorded in September.
Blow Up the Outside World
Nothing seems to break Bitcoin no matter how hard it falls. The price of the most widely traded cryptocurrency fell below the $100,000 level on Tuesday for the first time in more than six months. However, showing its trademark resilience Bitcoin’s price edged upward later in the week. Friday afternoon’s level of around $103,500 was still down sharply from the record high of around $125,000 but trending back in the right direction.
Superunknown
U.S. consumers are getting themselves afraid when it comes to the future. Sentiment fell to the lowest level in more than three years. Many survey participants citing concerns about the government shutdown and its impact on the economy. U.S. stock market volatility (VIX) reflected this fear. The VIX briefly surged to a three-week high at midday Friday before pulling back and finishing about 10% higher for the week. Adding to the super unknown, the Supreme Court on Wednesday heard arguments in a challenge over the legal authority that the Trump administration used in implementing tariffs earlier this year. Unfortunately, the high court didn’t indicate when it might issue a ruling in the case. This adds another layer of uncertainty for the economy and financial markets
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