Jobs Day

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.

Fed Preview and Key Levels to Watch in Yields

What’s in Today’s Report:

  • FOMC Preview
  • Did Dr. Copper Just Offer an All-Clear Signal?
  • Key Levels that Will Tell Us, in Real-Time, Whether Events this Week Are Positive or Negative for Stocks

Global markets are trading with a notable risk-off tone this morning as investors position into several key events later this week including the Fed and ECB announcements and next Sunday’s deadline for more U.S. tariffs on China.

Economic data overnight was positive as the Current Conditions and Business Expectations components of the German ZEW Survey were better than feared while the NFIB Small Business Optimism Index was 104.7 vs. (E) 102.9.

Looking into today’s session, thing should be quiet with the December Fed meeting getting underway however there is one economic report to watch: Productivity and Costs (E: -0.2%, 3.5%) and there is a 10 Year T-Note Auction at 1:00 p.m. ET this afternoon. If the auction triggers a significant reaction in yields, that will affect stocks.

There have not been any notable developments on the trade war this week and “no news is bad news” right now given the looming Dec. 15th deadline for the U.S. to add more tariffs to Chinese imports. As a result, the market will continue to look for any clues regarding progress towards a “phase one deal” that will avoid additional tariffs and potentially roll back existing ones.