STTG Market Recap Nov 1, 2012

Stocks were at important inflection points to begin the month of November, and the resolution of that issue was to the upside.  At least for the day.  Tomorrow’s employment data should set the tone for the next few days leading to the election.  A bevy of economic news was released today – some of it delayed by Hurricane Sandy – and most of it was good enough to lift spirits, if nothing special.  The most prominent was an ISM Manufacturing report which showed a second month of better readings, along with a monthly employment gain well north of 100K by payroll process company ADP.  Whatever the case it was enough to (a) lift the NASDAQ off its 200 day moving average and (b) push the S&P 500 back over April 2012 highs, which it had been stuck below for a week.

So at this point we see a multitude of broken charts, and the sharpest rallies often come within the context of a greater downtrend so after a dead cat bounce (if it continues for the next few days to a week) it will be important to watch the behavior of stocks.  If things roll right back over tomorrow it will of course also be a bad sign.

After the bell beaten up stocks LinkedIn (LNKD) and Startbucks (SBUX) posted earning reports that pleased the street and are up some 7% in the after hours session.  This should help the mood tomorrow although of course the employment data will dominate.  (Starbucks is trading near $50, and LinkedIn $115 – not reflected in charts below)

  • LinkedIn’s focus on professionals is working: The company reported better-than-expected third quarter results and raised its revenue guidance for the whole year. It is now projecting about 80 percent growth in revenue.  Non-Gaap EPS came in at 22 cents, twice what Wall Street expected.
  • LinkedIn grew cumulative membership 47 percent year-over-year, and 70 percent of the new members added in the quarter came from outside the US.

One area of strength today was “old tech” – both Intel (INTC) and Microsoft (MSFT) – darlings 15 years ago, showed some life.


The “too big to fail” financials, also continue to show a lot of relative strength.

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