Major averages fell yesterday on lower volume ahead of today's jobs data. Unemployment came in at 5%, below the 5.1% estimate, the lowest level since April 2008. 271,000 jobs were created in October, well ahead of the 180,000 estimate. Hourly wages rose at the fastest pace since the US recession ended in mid-2009. With the blowout jobs data in place, CME FedWatch now shows the probability of a rate hike in December at 74%. This, however, could create issues as we discussed in our Thursday Oct 29 MLR.
The European Central Bank remains firmly pledged to keeping their easy money policies in place, thus no rate hikes are expected from the ECB anytime soon. Further, the Bank of England yesterday said that due to the lack of sufficient global growth as well as anemic growth in the UK, it has no intention to raise interest rates. This flies in the face of analysts and economists who were expecting the BOE to be more hawkish in terms of future rate hikes.
U.S. futures fell on the news and are currently down around -0.4% at the time of this writing. Concerns remain that a rate hike may be too soon, and may well stir issues.
Social networking site Facebook (FB) had a buyable gap up after a strong earnings report. Pretax margin 57.1%, earnings and sales are re-accelerating, group rank 2. FB is a supercap which attract institutional money in this environment as witnessed by the NASDAQ-100 being the first major index to hit new highs.
Website hosting leader GoDaddy (GDDY) had a buyable gap up after a strong earnings report.