Dow Turns Positive (Just) At Last

wall

In a positive looking Monday all round on Wall Street, the Dow Jones Industrial Average finally turned the corner and climbed 165.22 points to 17,828.76 pushing it up for the year by 0.03%. It is not a lot, but it is heading in the right direction.

Next best performance was the S&P 500 which rose 24.69 points to 2104.05 and is now 2.2% up on the year.

However, the prize at the moment goes to the Nasdaq Composite which advanced 73.4 points and is now sitting comfortably at 5,127.15 which is no less than 8.3% up on the year.

Health Care And Energy

The health care and energy sectors led the way with Pfizer adding 3.7% to $35.06. US listed shares of Valeant Pharmaceuticals International rose by 7.2% to $100.47. Its’ shares had dropped sharply after a report from Citron Research in October which cast aspersions on some of its’ methods, but an updated report on Monday came up with no new allegations.

In the energy sector, the star performers were Exxon Mobil and Chevron.

Exxon Mobil shares climbed 3.1% to $85.28, while Chevron added 4.5% to $94.96. Chevron had announced that it was cutting its budget for 2016 by 25% and intends to lay off between 6,000 and 7,000 workers. Despite a sharp drop in profits compared with the same quarter 2014, the business still comfortably beat analysts’ expectations of earnings of 76 cents a share by reporting $1.09 a share. Total net income was $2.04 billion compared with $5.59 billion. Production fell by 1% to 2.5 million barrels of oil equivalent a day.

Non-Farm Payrolls Report

Many investors are waiting for the non-farm payrolls report which is due out on Friday, before making a decision on which way to go. Analysts interviewed by The Wall Street Journal are expecting that 183,000 new jobs will have been added in October. This means that the unemployment rate could drop from 5.1% to 5%.

One analyst, Mark Luschini, of Janney Montgomery Scott, commented that if there is a good jobs number this will increase the chances of an interest rate hike by the Fed in December.

However, it is worth noting that analysts have been saying this for months. Apart from an unexpected slide to 142,000 in September, the new jobs figures have been comfortably exceeding 200,000 for some months, and yet the Fed has declined to make a move. Despite the fact that the slowdown in China appears to be – yes – slowing down, the Fed also wants to see inflation heading towards its 2% target, which it is showing no inclination to do. We think it will be next March at the earliest before we can expect a rate hike.