Before The Bell
Following notably strong sessions this past Friday and Monday and a somewhat weaker performance on Tuesday, Wall Street opened the middle session of the week and the final trading day of a generally poor September nicely to the upside. A trio of positive factors helped the bulls to close out the month on a winning note. First, a report issued yesterday showed a solid uptick in pending home sales. Then, Automatic Data Processing (ADP) issued its monthly jobs survey, which indicated a healthy increase in job creation.
Most important, perhaps, the Treasury Secretary opined that he saw a heretofore elusive stimulus deal coming into view. Armed by those developments, the stock market opened decisively to the upside after the early action in the futures had suggested that the session would commence on a soft note. Meantime, the buying would persist, so that as the afternoon got under way, the Dow Jones Industrial Average had pushed ahead by more than 500 points.
This surge in stock prices would evolve even though the previous night's Presidential debate had been a most contentious affair. As for the rally, it would continue unabated until we moved inside the final two hours of trading finally cresting with a gain of 570 points in the Dow Industrials. Then, concerns arose about these efforts to broker a stimulus package from Congress. Worries on that count brought in the sellers during the final two hours of trading.
In fact, the Dow would give back more than half of its gain after the Senate majority leader threw cold water on hopes for an imminent deal. It would seem that at this point, the President will need to make a major effort to convince leader McConnell to move. In the end, the market would push higher again as the session culminated, with the Dow ending matters ahead by 329 points. It would seem that the bevy of positive economic releases issued early on also had a positive effect on trading.
So, September is in the books, and it was, in line with its historical reputation, a most trying month, with the Dow off 2.3%, the S&P 500 Index down 3.9%, and the tech-heavy NASDAQ lower by 5.2%. In all, this was the weakest September since 2011. Now, we look out to a new month, and as is often the case, October, which is known as a turbulent 31-day span, can be a rewarding one in the end. So, it is with that in mind that we will shortly commence trading.
As for the day ahead, we will get data later this morning on manufacturing activity. Then, tomorrow, we are scheduled to get the release of a survey on job creation. Ahead of all that, the futures now are showing a solid uptick in pre-market trading. So, October could well commence on a positive note. Stay tuned.
– Harvey S. Katz, CFA
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
