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Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Day

Futures are modestly higher ahead of the jobs report following slightly better than expected final global manufacturing PMIs.

Economic data overnight was better than expected as the Chinese Caixin manufacturing PMI (a private market reading) beat estimates (51.0 vs. (E) 49.3). While EU (43.5 vs. (E) 43.7) & UK (43.0 vs. (E) 42.5) final manufacturing PMIs were no worse than feared.

Today there are two important economic reports that have the potential to move markets.  The first is the jobs report, and expectations are as follows:  170K Job Adds, 3.5% UE Rate, 0.3% m/m & 4.4% y/y Wage Growth).

As we covered in the Jobs Report Preview, “Too Hot” readings in job adds or wages will likely push Treasury yields higher and weigh on stocks.  But, a “Too Cold” job adds number would be a potentially more concerning signal over the medium and longer term, regardless if there’s any short term “bad is good” rally.

The other important economic report today is the ISM Manufacturing Index (E: 46.8) and markets will want to see stability.  The August flash PMIs were ugly and if we see the ISM manufacturing PMI drop from current levels, that will increase hard landing concerns.

Finally, there’s one Fed speaker today, Mester at 9:45 a.m. ET, but she shouldn’t move markets.

Jobs Report Preview

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Market Multiple Update

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What’s in Today’s Report:

  • Market Multiple Table – June Update
  • ISM Manufacturing Index Takeaways

Futures are solidly higher today, rising with international markets thanks to easing geopolitical tensions offsetting COVID-19 worries and historic civil unrest in the U.S.

Chinese firms reportedly purchased multiple shipments of U.S. soybeans on Monday, contradicting earlier headlines that the government had broadly halted ag orders. The positive trade activity is acting as a tentative tailwind this morning.

There were no economic reports overnight but oil prices are up nearly 3% as OPEC+ (including Russia) is expected to extend current policy and output cuts beyond June.

Today, Motor Vehicle Sales (E: 10.0M) is the only economic data due to be released while there are no Fed officials scheduled to speak. That will leave investors largely focused on the simmering trade tensions between the U.S. and China as well as the ongoing, in some cases violent, protests across much of the U.S.