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Stocks ended the week trading lower, giving back a small portion of their weekly gains. Losses were modest, however, with the S&P 500 (-0.1%) and the Dow (unch) settling just below their unchanged marks. The tech-heavy Nasdaq (+0.1%) pushed out a small gain which set another record high. For the week, the S&P 500 added 1.2%. Market participants took the September jobs report with a grain of salt due citing the effects of the 2 recent hurricanes, Harvey and Hurricane. The jobs numbers showed employment in food services and drinking places declined by 105,000, pressuring nonfarm payrolls figures, which decreased by 33,000 ( consensus +75K).

There was a rosier picture in hourly earnings which showed an increase of 0.5% ( consensus +0.2%). This figure was also most likely affected by the 2 hurricanes, the news didn’t distract the market from readjusting rate-hike expectations. The CME FedWatch Tool currently places the chances of a December rate hike at 93.1%, up from 77.5% on Thursday.

Many of the S&P 500’s eleven sectors finished Friday in the red, but some of the heaviest spaces by weight, including technology (+0.3%), financials (unch), and consumer discretionary (+0.2%) eked out relatively decent performances, helping to keep the wider market’s loss in check. Tech climbed 0.3%, thanks mainly to large-caps like Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL), which added 0.6% and 0.9%, respectively. Chipmakers were also strong on Friday, sending the PHLX Semiconductor Index higher by 0.5%.

Meanwhile, Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), and McDonald’s (NYSE:MCD) helped carry the consumer discretionary space (+0.2%) to gains, settling with gains between 0.5% and 1.9%. NFLX shares had a solid week, adding 9.2%. On the other hand, the consumer staples space (-1.0%) underperformed with retail heavyweight Costco (NASDAQ:COST) losing 6.0%, despite having beaten both top and bottom line street estimates. Retail pharmacy names also tumbled following a Morgan Stanley downgrade of Walgreens Boot Alliance (WBA) to ‘Equal-Weight’ from ‘Overweight’; WBA shares lost 4.9%. The energy sector (-0.8%) was also sluggish as the price of WTI crude dropped 2.9% in the wake of concerns that Tropical Storm Nate has potential to negatively impact refineries around the Gulf of Mexico. Tropical Storm Nate is projected to hit the Gulf Coast this weekend.

Autumn’s Still Looking Rosy

Stocks started October on the front foot, climbing to new record highs once again, despite the devastating shooting in Las Vegas last Sunday evening. The major indices all settled the week in the green with the Dow, the Nasdaq, and the S&P 500 adding 1.7%, 1.5% and 1.2%, respectively. This week’s bullish turn had its roots in last week’s run to record highs, which was largely sparked by the GOP’s latest tax reform rhetoric. The House kept the ball rolling this week when it passed a budget that reduces government spending in anticipation of decreased tax revenue. The GOP still has far to go, but the market liked the progress. Excited by the idea of a tax overhaul, the financial stocks rallied 1.9% in the week to finish comfortably ahead of the broader market.

The financial sector has added 10.6% since closing at a 3-month low on September 7th and now trades just a tick under the benchmark index for the year. Automakers were strong this week after reporting largely solid U.S. sales figures for September, which were helped by the replacement of vehicles lost to Hurricane Harvey and Hurricane Irma. General Motors (NYSE:GM) showed strength, climbing 11.3%, after reporting a year-over-year increase of 12.0%. Netflix (NASDAQ:NFLX) also had a good showing, hitting a new all-time high, after UBS raised its target price to $225 from $190 and following news that the company will raise the price of its standard and premium video-streaming services. NFLX shares settled with a gain of 9.2%. Equities did end the week on a down note, however, following a noisy Employment Situation Report for September.


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