Closing Recap 4:10PM EST

Friday, November 7, 14

Index

Up/Down

Last

DJ Industrials

19.46

0.11%

17,573

S&P 500

0.71

0.03%

2,031

Nasdaq

-5.94

0.13%

4,632

Russell 2000

-0.29

0.02%

1,171

Equity Market Recap

Another lackluster session for major equities, as U.S. stocks ended little changed, trading just off
near record levels for the Dow Industrials and S&P 500 to end the week. The October Nonfarm
Payroll report was the highlight of the day, with some good/bad points, as it showed slightly
weaker than expected jobs growth (214k vs. 235k est.) and slower wages (rose 0.1% vs. est.
0.2%), but posted a drop in unemployment (to 5.8%), despite the participation rate inching up
from decade lows (and over 200k is still strong). Both the S&P and Dow Industrials post their
third straight weekly gains (S&P now up 10% YTD). The roller coaster rise in Energy continued,
with stocks helping lead today, as the price of oil bounced off multi-year lows, while there were
some very big swings post earnings in several names (SLXP, FSLR, MNST, HUM). The dollar pared
recent gains, gold jumped, oil rises, and treasuries rise.

Economic Data
U.S. Oct. Nonfarm Payrolls rose 214k (below 235K est.) while private payrolls also little light of
expectations (up 209k vs. est. 225k), and manufacturing jobs 15K vs. est. 9k, while the
unemployment rate dropped to 5.8% from 5.9%. Nonfarm payrolls, net revisions, added 31k from
prior two months. Also of note, the jobless rate fell despite the participation rate inching up to
62.8% from prior 62.7%. Average hourly earnings rise 0.1% MoM vs. est. 0.2%

Commodities
Gold futures snapped their 7-day losing streak, and in a big way, rising $27.20, or 2.4%, to settle
at $1,169.80 an ounce, as the dollar faded from multi-year highs following the jobs report which
showed less jobs created than expected (but also as a relief rally after getting crushed for several
weeks now closed at 4-week low Thursday). Despite the jump in gold today, the yellow metal
still ended the week in negative territory as the US dollar rally has weakened commodity prices.
Silver prices ended higher 30c to $15.71 an ounce
Oil prices ended higher; with WTI bouncing about 1% on the day, while Brent also jumped;
Natural gas prices pared recent gains, but posted big gains for the week on cooler weather

Currencies
The dollar ended on a weaker note, but still posted a very strong week; the Dollar index started
the week around the 77 level and touched 78 before pulling back today (fresh 4-year high at 88);
the pullback came on the heels of the slightly weaker jobs report, but still showed an improving
economy; the euro pared recent losses (dropped below 1.24 level yesterday), while the yen,
which has lost about 6c in a week after the BoJ QE news last Friday, also pared losses today,
trading around the 114.50 level

Bond Market
Bond markets rallied Friday following the Jobs report, sending yields falling before recovering
slightly in the afternoon; the U.S. 10-year Treasury yield fell about 9 bps at worst stretch to low of
2.3068% (last around 2.32%), while shorter term 2-yr fell to 0.48% and the 30-yr yield down to
3.04% before paring losses

Macro

Up/Down

Last

WTI Crude

0.81

78.72

Brent

0.64

83.37

Gold

27.20

1,169.80

EUR/USD

0.0068

1.2446

JPY/USD

-0.74

114.50

10-Year Note

-0.061

2.312%

Sector News Breakdown

Consumer
Retail sector; mixed news in retail space as winners include, SHLD which posted better Q3 comps
and said is exploring REIT for 200-300 properties; GPS guides Q3 eps 78c-79c (includes 6c benefit)
vs. 72 est./comps & sales below views; TGT upgraded by one analyst; on down side, ANF falls as
guides Q3 eps 40c-42c (est. 68c)/comps (-10%) vs. (-4.3%)/sales below as well (ARO, AEO move)
Staples; GIS reduces year sales/earnings forecast citing continued weak food-industry trends in
the U.S. and slowing growth in key emerging markets; SFM rpts better quarter, but lags (rallied
yesterday on WFM report); MNST leads beverages higher after Q3 EPS topped results (revs light);
FWM reverses earlier losses despite weaker sales
Gaming, Leisure, Lodging; lodging space lower after STAY Q3 eps misses by 5c at 29c (HOT, IHG,
H, HMIN move lower); in gaming, IGT reported, while casinos were mixed (MPEL was cut at JP
Morgan); PNK was cut at Barclays following the announcement it will pursue a tax-free REIT spinoff
Energy
Oil drillers recover; RIG delayed its Q3 results citing $2.76B in impairment charges; Goldman
Sachs says RIG write-downs not company specific, rather industry wide phenomenon for next
few years (to impact cos such as ESV, DO, NE, that have made substantial acquisitions in better
times) - sees potential for other write-downs group down early but recover
Solar stocks down early following FSLR quarterly results (shares of SPWR, SUNE, YGE, CSIQ, fall);
FSLR quarterly EPS beat by sales miss/reaffirmed FY14 eps view but trimmed its sales outlook;
FSLR said revenue dropped 30%/decides not to pursue yieldco

 Coal stocks (ANR, ACI, BTU, CNX, and WLT) rise for a third straight session; helped as Republicans
take control of Senate. Earlier today, new Senate majority leader Mitch McConnell said he feels
deep responsibility to stop EPA from regulating carbon-dioxide emissions at coal-burning
power plants. http://goo.gl/9cTJhQ
Rigs drilling for crude sank by 14 to 1,568 this week, the lowest since Aug. 22, according to Baker
Hughes Inc. (BHI); gas rigs were up 10 at 356. Rig report comes as U.S. oil production rose 2K
barrels a day in the week ended Oct. 31 to 8.972M,highest level in at least three decades EIA
Financials
Financials as a whole relatively quiet, tracking major averages, with few individual news stories
Asset managers; EV became the first fund company to win approval from the SEC for ETFs that
dont need to disclose their holdings on a daily basis (other asset managers also advanced)
NDAQ announced it be in control of the so-called UTP Securities Information Processor, or SIP,
which consolidates and releases price and trade data, for Nasdaq-listed securities
Insurers lower for a 2nd day; group was weaker Thursday following soft report from PRU and
news GNW raised its reserves and was taking goodwill impairments (more weakness today); AFL
was downgraded by one analyst (note a weaker yen negative for stock)
Healthcare
Several big movers in the healthcare/biotech space; SLXP shares plunged after Q3 miss/weaker
outlook for year/and audit committee will review the way the company characterized wholesale
inventory after CFO resignation http://goo.gl/rDx9oW; ICPT shares drop as its experimental drug
raised bad cholesterol and caused itching in patients, leading to need for more safety studies, the
Lancet published http://goo.gl/XWgckd
Hospital stocks (HCA, UHS, CYH, LPNT) came under pressure late day on reports the U.S.
Supreme Court will rule on a new challenge to the Affordable Care Act that examines whether
subsidies offered under the law are legal (if successful, would limit the availability of federal
health insurance subsidies for millions of Americans) http://goo.gl/74FVmv
Managed care stocks were lower given the weakness in HUM after Q3 eps/revs both trail
estimates/raises bottom end of year rev view/cuts cap-ex (shares of UNH, AET, WLP fell)
Movers on news; GALE preliminary data shows 31% recurrence rate in vaccine group vs 50% in
control group at median follow up of 13 months; AVNR said the FDA raised questions regarding
human factor validation study data; ROKA fell on earnings/rev miss (one analyst cut rating on
unexpected Listeria Product issues and a more onerous sales cycle); RMTI said an FDA advisory
panel voted 8-3 that efficacy, safety results of its Triferic supports positive benefit/risk to treat
iron loss; RPRX held constructive meeting w/FDA regarding Androxal NDA
Movers on earnings; DVA narrowed year view; BRKR cut outlook after Q3 miss; MDRX bookings
fall/Q3 results miss views; MTD EPS beat by 11c and raises sales forecast; MDVN provides year
Xtandi Sales at the high end of forecasted range
Industrials & Materials
Ag stocks/machinery; relatively quiet in the sector, but seeing outperformance for a 2nd day from
the likes of DE and AGCO on nothing specific
Metals & Mining stocks getting relief rally, led by strength in industrials metals/steel; gold miners
same situation, getting a lift (KGC) on jump in gold prices today
Transports; it was another record level for the Transport index, led today by surging rails, after
Bill Ackman said last night CP might be interested in a rival to one-time target CSX (shares of
UNP/NSC advanced) http://goo.gl/6XjDcq;

Technology, Media & Telecom

App game-makers with a good day as ZNGA and KING shares rise on earnings/guidance (ZNGA
analyst upgrade); both top quarterly sales views
Media movers; big week for media earnings, with DIS Q4 eps/revs topping consensus views last
night (narrow beat), but concern regarding as sales/higher programming costs hit shares; this
week saw beats from FOXA, TWX, CBS, weakness in DISCA
Semiconductors; SWKS fell sharply despite stronger quarter/guidance (co had issued positive
guidance a few weeks back) weighs on group (RFMD, QCOM, BRCM); NVDA also declines
despite better results; MSCC climbs on Q1 guidance SOX has been a big mover for tech of late
Software/hardware news; AVG has been approached by possible buyers, the WSJ rpts
http://goo.gl/NqZX2i ; ANET Q3 eps/revs beat, but announced early lock-up release for up to 50%
of shares; ECOM guides Q4 revs above estimates; SPLK/CA upgraded at Evercore (follows strong
report/guidance from DATA the day prior)
OLED -6%; cuts its year revenue forecast and said customer trends likely to continue into year
Other winners on earnings: CSC, SSTK, WAGE
Stocks down post earnings/guidance: UBNT

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