PreMarket Prep Recap: All About The Jobs Number

Benzinga's PreMarket Prep show began Friday with S&P 500 futures in the red, but the outcome for the day was to be determined by the September jobs report.

As it turns out, the number came in better than expected, with the U.S. economy adding 136,000 jobs last month, putting the unemployment rate at 3.6% — a 50-year low. The news could mean a recession is not as imminent as Wall Street and the yield curve suggest. 

As a result, the futures instantly went from red to green. Although the index has erased much of its decline from earlier in the week, it still has a way to go to turn positive for the week.

Costco Volatile After Mixed Q4

On the earnings front, Costco Wholesale Corporation COST was the only major report after the close Thursday.

After the close, the company announced a mixed fourth quarter, with 15-cent EPS beat and a sales miss of $1.61 billion. In after-hours trading, the Street focused on the sales miss as opposed to the EPS beat.

Costco's premarket low of $278.95 was identified on Friday's show as a support, as it coincided with its Aug. 27 low of $280.34.

Off the opening bell, buyers came in above that level, making the low at $283.32. The rebound off that low has exceeded Thursday's high ($290.86), so far reaching $291.95, which matches the issue's Sept. 17 high ($291.79).

Apple: The Star Of The Show  

Despite the futures being in the red at the start of the show, the strength in Apple Inc. AAPL was discussed.

The catalyst: Cupertino plans to raise iPhone 11 production by 10%.

PreMarket Prep co-host Dennis Dick identified a large seller in the $225.75 area, and it was discussed that the seller may be present in the regular session.

Apple shares were trading 2.79% higher at $226.99 at the time of publication. 

Hewlett-Packard Feels The Hurt 

The dog of the premarket session Friday was HP Inc HPQ, much to the chagrin of Dick, who owns the issue in his long-term portfolio.

The PreMarket Prep co-host said he's sticking with the stock and banking that it will eventually be a player in the 3-D printing sector.

Late Thursday, the company lowered its 2020 guidance, prompting Loop Capital to downgrade the issue and two other firms to lower their price targets.

Since the issue was hovering near its premarket low, it was important for the issue to hold its June 23 low ($17.10). Instead, it opened below that point and has cratered into the mid-$16 handle. 

Harmon On Shake Shack, Manhattan Associates 

Friday's guest was Greg Harmon of Dragonfly Capital Management. With respect to the overall market, Harmon is unsurprised by today's rally, as he does not view the economy as being headed for a recession.

Harmon discussed his tactical short in Shake Shack Inc SHAK and broke down the technicals in Manhattan Associates, Inc. MANH.

Both the author of this article and Harmon see the issue as being in breakout mode if it could clear the pesky highs at the $82.75 area. It cleared that hurdle off the open and has traded as high as $84.76 in Friday's session. The stock was up 1.54% at $83.79 at the time of publication. 

Next Week's Guests:

Monday: Cate Long, municipal bond expert and founder of Puerto Rico Clearinghouse

Tuesday: Nic Chahine, the author of Create Income With Option Spreads

Wednesday: Kenny Polcari, NYSE floor broker and CNBC contributor

Thursday: Jonathon Corpina, senior managing partner at Meridian Equity Partners

Friday: Joe Saluzzi, partner and co-founder of Themis Trading

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunesGoogle PlaySoundcloudStitcher and Tunein.

Related Links: 

PreMarket Prep Recap: Bull And Bears, Tesla Falls Short

PreMarket Prep Recap: Rough Start To The Quarter, Brokerage Wars, Timing is Everything

Posted In: Dragonfly Capital ManagementGreg HarmonPreMarket PrepLong IdeasNewsShort IdeasTrading Ideas

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