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Stock futures edge lower to start the week

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The floor at the New York Stock Exchange is occupied by traders.

NYSE

Stock futures dropped Sunday night, after closing near the line on Friday. Investors had gotten over concerns regarding Friday’s labor market report that was much less than anticipated.

Dow Jones Industrial Average futures lost 71 points or 0.2%. S&P 500 and Nasdaq 100 futures lost 0.28% and 0.33%, respectively.

The Dow fell 8.69 points, or 34.746.25, in regular trading on Friday. The S&P 500 lost 0.2% to 4,391.34. Nasdaq Composite dropped 0.5% to 14,579.54.

Although the disappointing jobs report initially sent the major averages lower at the beginning, investors responded positively to the news. However, they were able to digest the data more thoroughly and realized that things may not be as dire as it seemed. Friday’s Labor Department Report stated that economy added just 194,000 jobs in SeptemberComparable to Dow Jones’ estimate of 500,000.

Joe LaVorgna (chief Americas economist, Natixis CIB) stated in a note that the three-month average of nonfarm payrolls was a solid 550,000. At this rate, the unemployment will begin to recover its losses from pandemics by July next year. With the goal of completing the tapering process by June next year, it is clear that the economy has recovered sufficiently to warrant Fed action.

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Chris Zaccarelli is the chief investment officer at Independent Advisor Alliance. He said that it would take an “extremely poor” jobs report for the Federal Reserve to derail its plan to remove stimulus.

The unemployment rate was also lower at 4.8% than predicted by economists.

The third quarter earnings of major banks is expected to be released this week. JPMorgan Chase (Goldman Sachs), Bank of America and Morgan Stanley will all report on Wednesday. Walgreens Boots Alliance and Delta Airlines are also available.

Analysts estimate an earnings growth rate of 27.6% for the S&P 500 in the third quarter and a 15% price increase for the index over the next 12 months, according to FactSet. Financials will see the least price growth, since there was the most upside between the October closing price and the target price at the bottom.

No economic data is scheduled Monday.

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