Market Preview: Strong Employment Numbers Add Fuel

Flagging financial stocks rallied Wednesday providing enough fuel for the market to power higher once again. Taking a cue from the highest ISM non-manufacturing index numbers since 1997, markets rallied out of the gate and held onto fleeting gains into Wednesday’s close. The ISM numbers, combined with strong employment numbers also released Wednesday morning, forced trade tariff worries to the back burner. If financials can truly turn here, as many have been expecting for several months, citing rising interest rates, they may become the new flag bearer for the bull market. But, they’ll need more than one day of positive price action to pull investors to their banner.

Constellation Brands (STZ) reports earnings Thursday morning. The company known for its beverage products, recently upped its stake in Canopy Growth, a Canadian based medical cannabis company, by $4 billion. Investors will be looking for an update on how Constellation intends to integrate Canopy’s products with its brands, and what the timetable looks like. Also reporting earnings on Thursday is Costco (COST). The bulk item retailer is up nicely in 2018, and now sports a fairly rich PE of 36. Analysts are looking for sales and earnings growth to come in strong, but the more important number to focus on may be margins. If the membership company can show margins are moving in a positive trend, the stock could finish out 2018 on a strong note.

Given Wednesday’s data, scheduled Thursday and Friday economic numbers may support positive market action headed into the weekend. Both days are clearly focused on a discussion of jobs. Thursday we’ll see the Challenger Job Cuts Report along with jobless claims, and factory orders numbers. And then Friday brings the release of the employment situation numbers, which includes the unemployment rate, as well as nonfarm and private employment numbers. The unemployment rate is expected to drop again to 3.8%. Average hourly earnings are expected to tick up only .3%. Strong employment numbers could provide a base for the market to catapult into a strong fourth quarter.

Joining the earnings hit parade on Thursday is International Speedway Corporation (ISCA). Given the widely reported decline in the NASCAR fan base, most investors would probably be surprised to learn the stock is actually up over 17% so far in 2018. This may be a case of bad news already being baked into the stock price last year. Analysts don’t expect much out of the racing stadium owner on Thursday, and will mainly be looking for any signs of a stabilization of the fan base. No earnings are currently scheduled for Friday.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.