What a week it has been, and it’s not one the bears will have liked. Despite the busiest earnings week of the quarter, a Fed rate decision on Wednesday and the monthly jobs report on Friday, U.S. equities continue to hold strong. In fact, it was another day of record highs in the stock market today.
This time though, it wasn’t just the S&P 500, which notched its fourth daily record high this week. The Nasdaq Composite joined in as well, closing at its highs at 8,386.
In all, the SPDR S&P 500 ETF (NYSEARCA:SPY) climbed 0.94%, the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) rallied 1.1% and the PowerShares QQQ ETF (NASDAQ:QQQ) jumped 0.91%.
Driving the gains? The jobs report.
Economic Talking Points
The Chicago PMI reading caused some concern on Thursday, as stocks retreated a bit from the highs. However, on Friday those fears were put to rest following a better-than-expected non-farm payrolls report.
Expectations were low, calling for a jobs gain of just 89,000, part of which was linked to the strike at General Motors (NYSE:GM).
The tally came in at 128,000 for the month of October, well above forecasts. The unemployment rate and average work hours were in line with expectations, while sequential hourly earnings growth of 0.2% slightly missed expectations of 0.3%. However, both of the prior months were readjusted higher.
Later in the day though, the ISM manufacturing PMI came in at just 48.3, missing estimates of 48.9.
Not every economic report is perfect. Some cause concern, while others ease it. Friday was more of the latter, even with the ISM number. Some would even argue that our economy is in a great spot, at least for the stock market’s sake.
News From the Street
Apple’s (NASDAQ:AAPL) transactions are rapidly climbing compared to its competitor PayPal (NASDAQ:PYPL) — four times faster to be exact. Apple clocked more than 3 billion transactions last quarter, which more than doubled year-over-year, along with Apple Pay revenue. It also topped PayPal’s transactions.
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is joining the wearables space by snagging Fitbit (NYSE:FIT) for a price of $7.35 a share, a premium of about 19% to its prior closing price. This is roughly double the price of its trading price before talk of a potential buyout began. This purchase values FIT at about $2.1 billion and should be finalized in 2020. Reportedly, Facebook (NASDAQ:FB) was also considering an acquisition of Fitbit.
Kinder Morgan’s (NYSE:KMI) Executive Chairman Richard Kinder just bought 300,000 shares of KMI at $12.17 per share, totaling about $6 million. However, this is just a drop in the bucket compared to his overall stake. Kinder owns 242.2 million KMI shares in a personal account along with 11.8 million through a partnership. Kinder’s year-to-date purchases come to a total of more than $130 million.
Movers in the Stock Market Today
Arista Networks (NYSE:ANET) stock was hammered on Friday, falling 24.2%. While it closed well off the lows, it’s hard to overlook a $19 billion market capitalization stock take a 20%-plus haircut.
While the company beat on earnings and revenue expectations, fourth-quarter guidance came up embarrassingly short of expectations. Management is looking for sales of $540 million to $560 million. The $550 million midpoint is roughly 20% below analysts’ expectations for $686.6 million in sales.
General Electric (NYSE:GE) shares rallied 4% on Friday, after investors continue to digest the company’s better-than-expected earnings results from this week. Even more impressive though? Shares rallying on Friday despite word from JPMorgan’s Stephen Tusa.
Tusa has been a long-time bear on GE, correctly nailing the biggest downside moves. Tusa is maintaining his “underweight” rating and $5 price target — implying about 50% downside to the stock — and says the situation remains “far from low risk.”
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOOGL and AAPL.