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Good morning. Stocks shrugged off a hot wholesale inflation report Thursday as bond yields tumbled, and today brings bank and insurance earnings, industrial production and monthly options expiration.
The Market Gauge
Thursday ended green after some big swings. The S&P 500 rose 25.12 points (+0.33%) to 7,744.06. The Nasdaq reversed a steep early drop to finish up 20.16 points (+0.08%) at 26,713.03. The Dow jumped 556.21 points (+1.08%) to 52,177.69, led by a 5.2% gain in Nike. Small caps bounced too: the Russell 2000 rose about 1.4%, though it is still below its 200-day moving average.
The surprise was that stocks rose on bad inflation news. The producer price index, which tracks what businesses pay, jumped 1.3% in September and 6.3% from a year ago, far above the 0.5% and 5.4% economists expected. Retail sales also beat, rising 0.8% vs. 0.3% expected. Yet the 10-year Treasury yield fell 10 basis points to about 5.09%, as worries about debt at AI data-center companies pushed money into bonds. Lower yields helped consumer, software and medical stocks, while chip stocks kept sliding, with the VanEck Semiconductor ETF down 1%. On the NYSE, rising stocks beat falling ones by more than 3 to 1. Oil climbed about 3% to nearly $98 a barrel.
IBD's read: the S&P 500 and Nasdaq held their 50-day moving averages, and many consumer, medical and software stocks flashed buy signals. But AI stocks remain weak, and a sudden rebound there could pull money back out of today's leaders. IBD's advice is to stay cautious, make small buys only in areas that are working, avoid the hard-hit AI and chip names, and keep building watchlists.
Beginner note: Look past the index numbers. The Nasdaq barely moved Thursday, but rising stocks outnumbered falling ones by about 2 to 1 on that exchange. That count is called market breadth, and it tells you what the average stock did, not just the giant companies that dominate the index.
On today's calendar
Truist Financial (TFC) earnings, before the open: The regional bank holds its call at 8:00 a.m. ET. Bank results show how loans, deposits and borrowers are holding up with rates this high.
Import and export prices, 8:30 a.m. ET: What the U.S. pays for goods from abroad and gets for goods it sells. One more read on inflation after this week's hot numbers.
Travelers (TRV) earnings, before the open: The insurance giant reviews its results on a 9:00 a.m. ET call. Insurers make money when premiums cover claims, so watch for comments on storm losses and pricing.
Industrial production, 9:15 a.m. ET: How much U.S. factories, mines and utilities produced in September. It shows whether the industrial side of the economy is growing or shrinking.
Monthly options expiration: Today is the third Friday of the month, when many stock options expire. Trading can be heavier and some prices can move oddly near the close, so don't read too much into late swings.
On the radar: Paycom Software
$PAYC ( ▲ 4.44% ) Paycom sells payroll and HR software that businesses use to pay employees, track hours and manage benefits in one app. On Thursday the stock jumped 5.80% (+13.87) to 252.87, closing at its high of the day and a new 52-week high. Volume was about 981,000 shares, roughly 26% above its 777,000 daily average. IBD says Paycom cleared a flat base with a 244.98 buy point, which puts it about 3.2% above that entry. The usual 5% buy zone runs up to about 257.23. IBD also notes the stock is tied to overall employment, since Paycom earns more when its customers have more workers on payroll. Its next earnings report is expected around Nov. 4 (not yet confirmed by the company).
Why it's worth watching: A buy point is not a price to chase forever. The buy zone is the stretch from the buy point to 5% above it. Buying much higher than that means a normal pullback can hit your 7% to 8% sell rule before the stock has room to work. With Paycom already about 3% past its entry, the safe window is narrow, and that is a good habit to check on any breakout you see.
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ONE FOR THE ROAD
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Educational content only. Not financial advice. Past performance does not predict future results. Read the full financial disclosure.
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