Stocks Closed Mixed Ahead Of This Morning's Employment Report _work_labor_business_employ_1010_565x377.jpg) Image: Bigstock Stocks closed mixed yesterday with the Dow and the S&P finishing in the green, while the Nasdaq and the small-cap Russell 2000 finished in the red. But all of the indexes made solid rebounds after posting sharp losses early on. The day got started with the Challenger Job-Cut report which showed layoffs for August at 20,485 vs. July's 25,810. The upbeat jobs data continued with a better than expected Weekly Jobless Claims report which showed new claims down -5,000 at 232,000 vs. last month's downwardly revised 237K and views for 246K. The Productivity and Costs report showed Nonfarm Productivity down -4.1% annualized (although this was better than the consensus for -4.4%), while Unit Labor Costs were up 10.2% (also an annual rate), but beat expectations for 10.7%. The PMI Manufacturing report came in at 51.5 vs. views for 51.3. The ISM Manufacturing Index also beat expectations with a print of 52.8 vs. estimates for 52.0. Although, Construction Spending slipped -0.4% m/m vs. last month's -0.5% and the consensus for 0.0%. On a y/y basis, however, it was up a solid 8.5%. We'll see if the upbeat jobs data from yesterday carries over into this morning's Employment Situation report. The consensus is calling for 293,000 new jobs for last month (280K in the private sector and 13K in the public), with the unemployment rate staying the same at 3.5%. This morning's employment data could have an influence on what the Fed does on rates at their next FOMC meeting on September 20-21. Although, the Fed seems pretty committed to keep on raising interest rates to tackle inflation. And it's hard to imagine any scenario where they would change that. For one, the Fed Funds rate is only at a midpoint of 2.38% right now. Well below the inflation rate. And well under the Fed's estimate of getting the Fed Funds rate to 3.5% to 4%. Even with a 75 basis point hike later this month, that would still only put the target rate at 3.13%. So there's plenty more to go. So a hot jobs report should only embolden the Fed to remain aggressive. While a weak jobs report is unlikely to deter the Fed's resolve given how high inflation still is. And high inflation with a weakening jobs market would only put more pressure on the Fed to get inflation under control asap. In addition to the jobs report, we'll also get the Factory Orders report. Not quite as important. But it's yet another look at how the economy is doing. Today's trading session is likely to be a busy one given that today is the last trading day before the 3-day Labor Day weekend which has the markets closed on Monday. So be sure to catch this morning's employment report. It comes out at 8:30 AM ET. And be sure to have a great, 3-day long holiday weekend. See you on Tuesday,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
Post a Comment
Post a Comment