Daily Market Recap

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The S&P 500 declined 1.32% and the Dow was off 0.97%. The S&P 500 had its largest one day decline since late August and stocks closed near their lows. There wasn’t a significant catalyst for the selloff other than the fact the market has had a sharp advance since it ended its last decline on October 9th

Even in a down day, economic data continues to surprise to the upside. First, ISM data and now Q3 GDP data have shown the economy did not suffer due to the government shutdown. Advance Q3 GDP surpassed estimates posting a gain of 2.8% against an estimate of 1.9%. The stronger than expected numbers did re-ignite talk of a Fed tapering in some circles. Initial jobless claims declined 9,000 to 336,000 during the week ending November 2nd. Claims averaged roughly 340,000 over the most recent two weeks up from the 330,000 average seen in August.

The European Central Bank cut key interest rates by 0.25% to a new level of 0.25%. This led to a sharp selloff of the Euro against the $US.

Homebuilders, financials, and healthcare outperformed today while media, semiconductor, capital equipment, and retail were hit the hardest. Homebuilders rose on stronger than expected earnings form Beazer Homes and a positive pre-announcement from Toll Brothers.

Media has been a favored sector and the group sold off today as earnings reports did not provide further sufficient upside. E-commerce names dragged retailers lower today. Year-to-date laggard JC Penney stood out on positive sales data.

Source: PFS Group

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