Joey Solitro
Stocks closed higher Friday after the latest jobs report came in much stronger than anyone was expecting. Investors also looked ahead to next week's busy lineup, which includes a key inflation update and the start of third-quarter earnings season.
Ahead of the open, data from the Bureau of Labor Statistics showed the U.S. added 254,000 new jobs in September – easily outpacing economists' estimate for the addition of 150,000 positions. Meanwhile, the unemployment rate fell to 4.1% from 4.2%.
The September job report "should put to rest – at least for the next month – the idea that the economy is about to fall off a cliff or that imminent doom is on the horizon," says Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
While Zaccarelli doesn't want to get too optimistic based on one report, "what we have now is an economy that is expanding, a job market which is solid (if not strong) and a Federal Reserve that has not only stopped raising rates, but is actually cutting them." He adds that this is "an excellent backdrop" for owning stocks.
Meanwhile, according to CME Group's FedWatch Tool, futures traders are now pricing in a 99% chance the Fed will cut rates by a quarter-percentage point at its November meeting – up from 68% one day ago. Odds of half-percentage point rate cut plunged to 0% from 32%.
Rivian sinks on deliveries miss
In single-stock news, Rivian Automotive (RIVN) underperformed Friday, declining 3.2% after the electric vehicle maker's third-quarter deliveries came in below expectations. To make matters worse, the company lowered its full-year production outlook due to a supply shortage.
"We have been skeptical of RIVN's ability to achieve its 2024 guidance from the start and think the announcement is likely to raise red flags among investors," says CFRA Research analyst Garrett Nelson (Sell).
He adds that his list of concerns toward the stock is "lengthy" and includes "slowing EV growth, a lack of visibility related to its reservation count, a troublesome cash burn rate, and the high capital expenditures requirements of building a new factory in Georgia."
Tesla stock gains ahead of robotaxi event
Elsewhere, Tesla (TSLA) stock shot up 3.9% ahead of next week's highly anticipated robotaxi event. The EV maker is expected to unveil its Cybercab prototype and the robotaxi platform at Thursday's "We, Robot" event. TSLA is also likely to release an update for its Full Self-Driving (FSD) technology and reveal a timeline for when the vehicle and service will go live.
But Bernstein analyst Toni Sacconaghi Jr. thinks Tesla is just playing catch-up at this point. "While Tesla is clearly focused on launching a robotaxi, Waymo and Cruise are already operating robotaxis in the U.S. today," the analyst says. "The available data is clearly imperfect, but as of today Tesla appears to be lagging behind the leaders in the space."
Will Spirit Airlines file for bankruptcy?
Spirit Airlines (SAVE) stock plunged 24.6% after a report in The Wall Street Journal suggested the low-cost carrier is in discussions about a possible Chapter 11 bankruptcy filing.
"A potential bankruptcy filing from Spirit Airlines would not be a surprising result given the state of the industry and specific situation at the airline," says Peter McNally, global head of analysts at Third Bridge. "Since the tie-up with JetBlue (JBLU, +14.2%) was terminated earlier this year, the challenges facing Spirit Airlines have only intensified, and a return to a normal operating environment was never in the cards."
As for the main indexes, the Dow Jones Industrial Average added 0.8% to 42,352, the S&P 500 rose 0.9% to 5,751, and the Nasdaq Composite gained 1.2% to 18,137.
Looking ahead, there are plenty of potential fireworks on the immediate horizion. While Thursday morning's release of the September Consumer Price Index (CPI) headlines a busy economic calendar, third-quarter earnings season kicks off with several big banks set to report on Friday.
Related content
- Amazon Prime Day vs Walmart Deals: Which Is Better?
- Election 2024: Politics and Your Portfolio
- How to Spot a Bubble in Stocks
-
Fed's Rate Cuts Could Have Impacts You Might Not AnticipateUnderstanding how lower interest rates could impact your wallet can help you determine the right financial moves to make.
-
Past Performance Is Not Indicative of Your Adviser's ExpertiseMany people find a financial adviser by searching online or asking for referrals from friends or family. This can actually end up costing you big-time.
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
Past Performance Is Not Indicative of Your Financial Adviser's Expertise
Many people find a financial adviser by searching online or asking for referrals from friends or family. This can actually end up costing you big-time.
-
I'm a Financial Planner: If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us? A Retirement Psychologist Makes the CaseA retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Adviser: This Is How You Can Adapt to Social Security UncertaintyRather than letting the unknowns make you anxious, focus on building a flexible income strategy that can adapt to possible future Social Security changes.
-
I'm a Financial Planner for Millionaires: Here's How to Give Your Kids Cash Gifts Without Triggering IRS PaperworkMost people can gift large sums without paying tax or filing a return, especially by structuring gifts across two tax years or splitting gifts with a spouse.
-
'Boomer Candy' Investments Might Seem Sweet, But They Can Have a Sour AftertasteProducts such as index annuities, structured notes and buffered ETFs might seem appealing, but sometimes they can rob you of flexibility and trap your capital.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Got $100 to Gamble? These Penny Stocks Could Be Worth the RideVolatile penny stocks are high-risk plays with potentially high rewards. If you have $100 you can afford to lose, these three names are worth a look.
