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Markets performed well to start another week — our heaviest for earnings reports so far this quarter — which is getting off to a slow start. While we await earnings from Alphabet (GOOGL) , Microsoft (MSFT) , Apple (AAPL) and Amazon (AMZN) in coming days, we’re seeing a few key names just trickle in here and there.

The Dow closed +417 points on the day, +1.34%. The blue-chip index is now up +7.65% over the past month — even more off its September 30 low. The S&P 500 wasn’t too shabby today, either: +1.19% (+3.81% in the past month), while the Nasdaq grew +0.86% — +1.39% since this time a month ago, though +630 points higher than its mid-October low. The small-cap Russell 2000 headed +0.35% north on the day, a very respectable +5.59% for the month.

Apple’s coming earnings print should be interesting; just today (in Q4), the company announced price hikes for Apple Music and Apple TV+. This follows a price hike for the new 14-model iPhones recently. Is the world’s biggest gadget-maker in danger of putting up less than impressive numbers this quarter? With difficulties in its China market and in-store sales down in the last-reported quarter, it would count as a possibility, although Apple is a very reliable earnings-beater.

Earlier today, we saw new data from PMI Manufacturing and Services — both of which not only came in light of expectations, but beneath the 50-level between growth and contraction. Manufacturing for October reached 49.9, off the 51.8 expected and the unrevised 52.0 reported last month. It’s the first time Manufacturing has been below 50 since the pandemic, which is the only ever sub-50 read going back to 2013.

Services only came in at 46.6, well off the 49.7 expected and downwardly revised 49.3 a month ago. Weak client demand, and — in what may be a first in this cycle’s employment data — employment down for the first time since June 2020 are the key findings here. Companies apparently are not as often re-hiring employees who leave their positions. But this is the weakest business level we’ve seen since September 2020.

The Fed wants to see a plurality of these sorts of economic data before amending its current interest rate hike trend. We frankly haven’t seen enough data pointing directly to labor market weakness ahead of next Wednesday’s latest interest rate hike to expect anything other than a 75 basis-point (bps) raise, to 3.75-4.00%. The markets priced this in — and then some — over the last 2-3 weeks, depending on the index, but do not look ready to revisit these lows anytime soon.

One possible scenario that might freak out markets in the next couple weeks looks from here to be merely a matter of bad timing: if the Fed, on November 2nd, hikes 75 bps as expected — and then jobs numbers two days later show a big leg down (say, sub-100K after posting 263K last month) — this could press the nagging fear that the Fed is going to tighten too far too fast, and they won’t see what they broke until it’s too late.

But even if all these predictions somehow come to bear, any shakiness the markets would feel on such a notion would be easily quelled by subsequent dovish language from the Fed. They would hint at a slow-down or a stoppage, though probably not a pivot, and before you know it the markets would be back at the races.

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