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Jobs Day

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What’s in Today’s Report:

  • Omicron Update
  • OPEC Meeting Takeways

Futures are slightly lower as markets digest Thursday’s rally ahead of the jobs report.

In Washington, the Senate passed a bill to avoid a government shutdown, removing a potential risk from markets.

The Omicron variant has been detected in five states now but symptoms so far appear mild.

Economically, EU and UK Composite PMIs generally met expectations.

Today focus will be on the Job Report and expectations are as follows: Job Adds 543K, UE Rate 4.5%, and Wages 5.0% y/y.  As long as the jobs report is around expectations (so not above 700k but still showing solid job additions with wages not spiking) then markets will expect a mild acceleration of tapering and the rally can continue.   We also get the ISM Services PMI (E: 65.0) and markets will be looking for a similarly “Just Right” number to show solid growth but nothing so strong it would encourage the Fed to substantially accelerate tapering of QE.

What the Disappointing Jobs Report Means for Markets

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What’s in Today’s Report:

  • What the Disappointing Jobs Report Means for Markets
  • Weekly Market Preview:  Can the Goldilocks Setup Continue This Week?
  • Weekly Economic Cheat Sheet:  Key Inflation Data This Week

Futures are flat following a mostly quiet weekend of news as markets digested Friday’s jobs report, which was a disappointment but isn’t changing the broad market outlook (more on that in the Report).

Commodity prices continued to surge over the weekend, and that’s going to continue to increase inflation pressures.  Iron Ore prices rose 10% as China tightened supply amidst the global recovery.   Meanwhile, wholesale gasoline prices rose 2% following a cyber-attack that closed the Colonial Pipeline, although the outage isn’t expected to be long-lasting.

Today there are no notable economic reports and only one Fed speaker, Evans (8:30 a.m. ET, 2:00 p.m. ET).  So, unless we learn the Colonial Pipeline outage will be long-lasting (which would send gasoline prices sharply higher), I’d expect relatively quiet trading today.

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