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ADP, Bitcoin and Q3 Earnings: More Big Numbers

Wednesday, November 1, 2017

On this first day of November — following a robust October, which was the best trading month since February — the ADP ADP private-sector payroll wastes no time shedding light from the month of October from labor market activity. This also means Friday will bring us the non-farm payroll report from the Bureau of Labor Statistics (BLS) which together bring us more or less up to date on the health of the domestic jobs market.

The latest ADP headline number was well out in front of expectations: 235K new private-sector jobs filled well surpassed the 190K analysts had expected. However, September’s total was revised downward by 25K new jobs to 110K overall. Averaging the two months — which may be useful in helping comb-out anomalies related to the two major hurricanes that struck the continental U.S. shores several weeks ago — we come up with 170K. This is still far stronger than what the economy “needs” to continue strengthening the U.S. labor market.

Pointing toward the post-hurricane rebuild, the sector breakdown shows 62K Construction jobs having been created in the month, the top job-creating industry last month, followed by the steadily growing Leisure/Hospitality and Education/Healthcare results of 45K and 39K, respectively. Goods-producing jobs reached 85K while Services maintained its strong advantage at 150K jobs in October.

The estimate for Friday’s BLS report is 315K. This is an impressive headline, but also may be susceptible to the same hurricane-related affects, including downward revisions. Somewhere in the high 100Ks is where analysts are looking for that two-month average to wind up.

Bitcoin’s Record High

The CME Group CME announced it will launch a futures trading platform on the Bitcoin cryptocurrency sometime before year’s end. Bitcoin has been hard to ignore in 2017, trading up nearly 500% year to date, and currently trades at an all-time high near 6500. Not too shabby for a product without any federal government backing anywhere in the word, and with plenty of high-powered naysayers like JPMorgan CEO Jamie Dimon.

Huge Day for Q3 Earnings

After the closing bell today, we will see earnings results from a metric ton of notable companies in big tech and elsewhere. Facebook FB and Tesla TSLA and the two marquee names, but this afternoon also includes Qualcomm QCOM, Kraft-Heinz KHC, Fitbit FIT, Shake Shack SHAK and dozens of others. Q3 earnings season is again bearing out market strength, even among small-cap stocks, as this interview with Tracey Ryniec and Zacks Director of Research Sheraz Mian illustrates: Is This a Buying Opportunity in Small-Cap Stocks?

Ahead of today’s opening bell, specialty retailer Estee Lauder EL is up 7% on a strong fiscal Q1 2018 quarter which saw earnings rise 42% year over year and revenues up 14%. $1.21 per share topped the 98 cents in the Zacks consensus, and sales of $3,274 million outperformed our estimate of $3,164 million. Estee Lauder also raised its earnings guidance for both Q2 and full-year 2018.

Consumer discretionary giant Clorox Group CLX also outperformed its fiscal Q1 2018 expectations during today’s pre-market, posting $1.46 per share for a 5-cent beat on $1.50 billion in quarterly sales, ahead of the $1.48 billion anticipated. However, the company shaved down full-year estimates for both sales and earnings. Shares are up 1% ahead of the opening bell.

Specialty tech products firm Garmin GRMN also beat estimates on its top and bottom lines this morning: 75 cents per share topped the 66 cents expected, and revenues of $743 million outpaced the $718 in the Zacks consensus. The company also raised guidance, and we see shares up 4.7% in today’s pre-market.

Mark Vickery
Senior Editor

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