Stocks Rally Into Close, All Eyes On Friday's Jobs Report

Market Moves You Need to See Stocks Rally Into Close, All Eyes On Friday's Jobs Report [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Rally Into Close, All Eyes On Friday's Jobs Report [Stocks Rally Into Close, All Eyes On Friday's Jobs Report]Image: Shutterstock Stocks closed higher yesterday with all of the major indexes rallying into the close. Falling Treasury yields also helped out. (Although, they are still near a 16-year high.) We had a full docket of reports yesterday. Motor Vehicle Sales rose to 15.7 million units (annualized) vs. last month's upwardly revised 15.3M and views for the same. MBA Mortgage Applications fell -6.0% w/w with purchases down -5.7% and refi's down -6.6%. The PMI Composite report increased to 50.2 vs. last month's 50.1. Although, the Services Index slipped to 50.1 from 50.2. The ISM Services Index declined to 53.6 from last month's 54.5, but beat the consensus of 53.5. A reading above 50 indicates growth in the services industry. Factory Orders rose 1.2% m/m vs. last month's pace of -2.1% and views for 0.2%. And the ADP Employment report came in under expectations with an estimated 89,000 private sector jobs being created in September vs. last month's upwardly revised 180,000 (from 177K), and expectations for 150,000. The lower than expected ADP report was in contrast to Tuesday's hotter than expected Job Openings and Labor Turnover Survey report (or JOLTS for short). The hotter report weighed on stocks as it suggested more rate hikes to come. The lower than expected ADP report countered that and helped lift stocks yesterday. But the jobs report everybody is really waiting for is Friday's Employment Situation report. Last month's report showed more jobs were created than expected, but that job growth cooled from its record setting pace, while hourly wage growth rose less than expected. Robust job growth is wanted, but not rip-roaring job growth as that signals the increase in interest rates is not having as much of an effect at slowing the economy down (and thus inflation) as expected. Friday's Employment Situation Report is expected to show 160,000 new jobs were created in August (150K in the private sector and 10K in the public), with the unemployment rate ticking lower to 3.7% from 3.8%, and average hourly wages coming in unchanged from last month at 4.3%. That's definitely the main event this week. But we'll get 2 more jobs reports before that today: Weekly Jobless Claims, and the Challenger Job-Cut Report. We'll also get the International Trade in Goods and Service report. And we'll see if the market can build on yesterday's gains. In spite of the rough start this month, remember that the statistical odds of a rally in Q4 are pretty compelling. History shows if the market is up more than 10% thru July, and August is down, the remainder of the year is up 100% of the time with an average gain of 9.9% (median of 8.7%). Those are great odds. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Tiny Semiconductor Stock Set to Explode (You probably haven't heard of it)]( We've chosen a small-cap primed for extreme growth that could rival or surpass our +850% gain in the giant NVIDIA over the past 3½ years. Today you can get aboard this under-the-radar company for under $10. But the window of opportunity could be brief as the company gains more traction. Flush with patents, it's poised for a huge year with strong earnings growth and an expanding customer base. Download our Special Report for only $1 One Semiconductor Stock Stands to Gain the Most. Hurry, the deadline is midnight Sunday, October 8. 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