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Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • EIA Data and Oil Update

Futures are moderately lower on digestion of Wednesday’s rally and some disappointing economic data.

EU Retail Sales badly missed estimates (-1.3% vs. (E) 1.5%) which is slightly increasing concern about the EU economic recovery.

Global August service and composite PMIs (China/EU) were generally in-line with expectations while the British service PMI slightly missed estimates (58.8 vs. (E) 60.1).  Bottom line, the numbers weren’t great, but they weren’t awful either and generally speaking they won’t change the current market outlook.

Today there are two important economic reports, Jobless Claims (E: 977K) and the ISM Non-Manufacturing PMI (E: 56.8), and the market will want to see the actual data close to or better than both numbers to reinforce the economic recovery is ongoing.  There’s also one Fed speaker today, Evans at 1:00 p.m. ET.

Finally, it’s important to note that vaccine “chatter” is getting louder and the chance we get a vaccine announcement before the election (November 3rd) is rising.  Yesterday the CDC formally notified all 50 states to be ready to distribute a vaccine by late October/early November, so I want everyone to be aware of that, as a vaccine announcement would be another positive for stocks.

Jobs Report Preview (Recovery On/Recovery Pause/Recovery Stall)

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What’s in Today’s Report:

  • Jobs Report Preview:  Recovery On/Recovery Pause/Recovery Stall

Futures are moderately lower following lack of progress on the stimulus bill, combined with further escalation of U.S./China tech tensions.

Markets were hoping for a stimulus deal by today, but there’s been no progress on negotiations for two days.  So while the market still fully expects a deal by next week, there is disappointment that it likely won’t get done by the end of this week.

U.S./China geo-political tensions continue to rise as President Trump issued an executive order banning U.S. transactions with the parent companies of TikTok and WeChat.

Focus today will be on the Employment Situation report and expectations are as follows:   Job Adds: (E) 2.0M, Unemployment Rate: (E) 10.5%.

Bottom line, the strong economic data from earlier this week has made this jobs report more important than it was going to be, as this morning’s number now has the chance to signal the economic recovery is still on (a positive for stocks) or increase concern it’s stalling (which will be a headwind on equities, especially at these levels).

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • A Historic Quarter for the Energy Markets

Stock futures are trading modestly lower this morning after the S&P 500 registered its best quarterly gain in over 20 years in Q2 while economic data was mostly better than expected overnight.

Economically, China’s Caixin Manufacturing PMI firmed to 51.2 in June from 50.7 in May while the Eurozone Manufacturing PMI rose to 47.4 from 39.4 in May pointing to a continued rebound in economic activity last month.

Today, we will get our first look at June jobs data with the ADP Employment Report (E: 3.500M) due out ahead of the bell while the ISM Manufacturing Index (E: 49.0) and Construction Spending (E: 0.8%) will both be released shortly after the open.

Later in the day, the only real catalyst to watch for is the release of the latest FOMC Meeting Minutes at  2:30 p.m. ET as traders will be looking for any additional insight into the Fed’s future stimulus plans or view of the state of the economy.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • ECB Decision Takeaways (The Outlook for Europe Continues to Improve)

Futures are sharply higher thanks to a big rally in European markets, which rose on the hopes for more stimulus.

The rally in Europe didn’t come because of any new headlines, and instead appears to be a delayed reaction to the bigger than expected ECB QE program, combined with the passage of the German stimulus earlier in the week.

Economically, the only notable number was German Factory Orders which fell –25.8% vs. (E) -20%.

Today the focus of markets will be the jobs report, and the estimates for job adds and the unemployment rate are as follows: Job Adds:  -7.725M, UE Rate: 19.8%.

Practically speaking, anything less than 10 million job losses likely doesn’t cause a pullback in stocks, while a number under 5 million job losses could extend today’s early rally, because markets are still solely focused on the incremental changes in economic data, not the historically bad absolute values.  The only other notable economic report today is Consumer Credit (E: -$14.0B).

Jobs Report Preview (Can the Market Look Past 20 Million Job Losses)?

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What’s in Today’s Report:

  • Jobs Report Preview (Could the Market Look Past 20 Million Job Losses?)
  • Why Are Treasury Yields Rising?
  • EIA Analysis and Oil Update

Futures are sharply higher thanks to better than expected Chinese export data.

Chinese exports rose 3.5% vs. (E) -11%, sparking hope that their economy is quickly getting back to “normal.”

But, in reality, data was more mixed than good as Chinese service PMIs remained weak (44.4) while German Industrial Production missed estimates –9.2% vs. (E) -6.4%.  Additionally, the better than expected Chinese export data was due in part to a surge in medical supply exports, something that’s hopefully not needed for much longer.

Today focus will be on Jobless Claims (E: 2.991MM) and has been the case for the past few weeks, continued declines from the previous week will give the market hope that the economic “worst” is behind us.

Finally, there are multiple Fed speakers today including Bostic (8:30 a.m. ET), Kashkari (12:00 p.m. ET) and Harker (E: 4:00 p.m. ET), but none of them should move markets.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • Why Have Stocks Rallied?

Global equities rallied overnight and stock futures are trading higher today after China reduced tariffs on $75B worth of U.S. goods, spurring optimism for a “phase two” trade deal and further easing concerns about the coronavirus outbreak’s impact on the global economy.

Outside of trade news, OPEC+ has agreed to cut their collective oil output target by 600K b/d to help support oil prices which crashed into a bear market this week on Wuhan coronavirus fears.

Today, there are two economic reports to watch: Jobless Claims (E: 215K) and Productivity and Costs (E: 1.5%, 1.2%) while two Fed officials will speak: Kaplan (9:15 a.m. ET) and Quarles (7:15 p.m. ET).

Additionally, there are a few earnings releases due out including: TWTR ($0.28), BMY ($0.88) and UBER (-$0.68), however given the latest trade-war news, the markets will remain largely focused on China’s decision to cut tariffs and any new developments regarding the coronavirus outbreak.

Jobs Day

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What’s in Today’s Report:

  • Key Levels To Watch in the Dollar Index and 10 Year Yield (Post Jobs Report)
  • Jobs Report Preview (Abbreviated Version)

Futures are solidly higher again following another quiet night as momentum continues to push the market to fresh highs, ahead of the jobs report.

There was no new geopolitical news overnight and international focus has now turned to whether the Ukrainian flight was hit by an Iranian missile.  That shift in focus is helping tensions to recede further.

Economic data was sparse as Japanese Household Spending missed estimates while Aussie Retail Sales beat expectations, but neither number is moving markets.

Today the key number is the Jobs Report, and expectations are as follows:  Jobs 158K, UE Rate 3.5%, Wages 0.3%/3.1%.  The key number is the wage data, but unless we see wages spike close to, or above 3.5% y/y, then the jobs report shouldn’t derail the rally.

Jobs Report Preview (All About Wages)

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What’s in Today’s Report:

  • Jobs Report Preview (All About Wages)
  • Oil Update (EIA Analysis)

Futures are modestly higher as U.S./Iran tensions continue to recede.

There was no new geopolitical news overnight, and the rockets that hit the “Green Zone” in Iraq into the closing bell on Wednesday were a small, isolated event.  As such, futures are essentially recouping that late-day dip.

Economic data was again mixed as German IP was better than expected, while German exports missed estimates.

Today there is one notable economic reports, Jobless Claims (E: 219K), and markets will want to see a continued decline that effectively reverses the Thanksgiving spike.

There are also numerous Fed speakers today including, in order of importance, Clarida (8:00 a.m. ET), Williams (11:30 a.m. ET), Kashkari (9:30 a.m. ET), Barkin (12:45 p.m. ET), Evans (1:20 p.m. ET).  Broadly, markets expect a continued reiteration of the message that the Fed isn’t raising rates until inflation is sustainably higher.

Fed Day and Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • Is Natural Gas About to Surge?
  • What Constitutes a Positive Move Post Fed?

Futures are flat ahead of the Fed decision and multiple key economic releases today while int’l shares declined overnight on soft data.

The Eurozone EC Economic Sentiment Index dropped to 100.8 vs. (E) 101.4 in October, a fresh 3+ year low as recession concerns continue to weigh on growth expectations.

The FOMC Meeting Announcement at 2:00 p.m. ET and Fed Chair Powell’s Press Conference at 2:30 p.m. ET will clearly be the main events for the markets today however there are two key economic reports that warrant attention before the bell this morning: Econ Today: ADP Employment Report (E: 139K) and Q3 GDP (E: 1.7%).

Meanwhile, earnings season remains in full swing with multiple important reports due out today: GE ($0.12), SNE ($1.08), YUM ($0.94), AAPL ($2.84), FB ($1.91), SBUX ($0.70), WDC ($0.28), SU ($0.54).

Bottom line, economic data and earnings will be able to influence early price action across asset classes today but where equity and bond markets close will almost exclusively rely on whether the Fed meets expectations, comes across as dovish, or offers another hawkish (and bearish stocks) surprise like we saw back in late July.

Is a Bad ISM PMI Really Worth a 3% Pullback?

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What’s in Today’s Report:

  • Jobs Report Preview
  • Is A Bad ISM Really Worth a 3% Pullback?

Futures are enjoying a modest oversold bounce despite more trade noise and disappointing economic data.

On trade, the U.S. imposed $ 7.5 billion worth of tariffs on the EU following a WTO ruling.  But, while the headline is scary, this was widely expected and not a new negative.

Economic data was soft again as Japanese and EU composite PMIs and the UK services PMI all missed estimates.

Today the focus will be on economic data and the key report is the ISM Non-Manufacturing Index (55.4).  If it badly misses expectations, concerns about a broader economic slowdown will grow further, and that will weigh on stocks again.  We’ll also be watching Jobless Claims (E: 215K) for any signs of slowing in the labor market.

There are also several Fed speakers today, but with rate cuts expected, I doubt they will say anything too material.  Speakers today include:  Quarles (8:30 a.m. ET), Mester (12:10 p.m. ET), Clarida (6:35 p.m. ET).