“Yesterday’s tech weakness, even if it just part of a healthy pullback in an extended sector, does set up a potential danger spot for stocks over the coming days,” says Tom Essaye of The Sevens Report, noting tech has powered stock gains this year even in the face of trade uncertainty.
“Gordon largely turned out to be a non-event for the energy market, and if anything, the sell-the-news aspect of the tropics trade has triggered a profit-taking pullback across the space,” says Tyler Richey of the Sevens Report.
Futures are modestly lower following a night of mixed economic data and a somewhat negative trade headline.
The WSJ published a trade article that implied the chances of a near term U.S./China deal were declining, but also said a decision on the 200 bln in new tariffs was weeks away.
Economic data was mixed as German Industrial Production missed estimates (-1.1% vs. (E) 0.3%) while Japanese Household Spending beat (0.1% vs. (E) 1.0%).
Today focus will be on the jobs report, and the expectations are: Jobs (E: 195K), Unemployment (E: 3.8%) and Wages (E: 0.3% m/m, 2.8% y/y). As has been the case for the last few jobs report, as long as we don’t have “3’s” across the board (300k job adds, 3% unemployment and 3.0% yoy wage gains) this report shouldn’t be too much of a headwind on stocks.
Finally, in addition to the jobs report we also have two Fed speakers, Rosengren (8:30 a.m. ET) and Mester (9:00 a.m. ET), but neither should move markets.