Stocks Down Again, Traders Await Friday's Jobs Report  Image: Bigstock Stocks closed lower again yesterday as traders await Friday's Employment Situation report. Inflation, interest rates, and the pace of the economy are the three big things on everyone's mind. Friday's employment report will address the latter. And could very well influence what the Fed does in addressing the first two. Yesterday's ADP Employment Report came in well under expectations at 132,000 private payroll jobs vs. the consensus for 225,000. Although, the ADP report has a spotty track record of predicting what the Bureau of Labor Statistics (BLS) will say in their official Employment Situation report two days later. Moreover, this is the first month that ADP has published their report since missing last month while they worked to 'retool' their 'methodology to provide a more robust' report. So we shall see if ADP's lower job numbers yesterday correctly foreshadowed what the BLS report will say on Friday. The BLS report is calling for 293,000 new jobs (280K in the private sector and 13K in the public.) In other news, MBA Mortgage Applications fell -3.7% w/w, with purchases down -1.8% and refi's down -7.8%. The Chicago Purchasing Managers Index (or PMI) came in at 52.2 vs. last month's 52.1 and views for the same. And the State Street Investors Confidence Index rose 5.1 points to 107.3 from last month's 102.2. The European component was up a sizable 20.4 points at 106.0. The North American component was up 2.1 points at 106.5. And the Asian component fell -0.9 points to 92.4. We also heard from Cleveland Federal Reserve President, Loretta Mester, yesterday when she said she believes "it will be necessary to move the Fed Funds rate up to somewhat above 4% by early next year and hold it there." She followed that up by saying, "I do not anticipate the Fed cutting the Fed Funds rate target next year." She also said she expects the economy to grow by "well below 2%," and expects inflation to fall to 5-6% this year, and falling even more after that. Today we'll get another look at the economy with the Challenger Job-Cut Report, Weekly Jobless Claims, the Productivity and Costs report, the PMI and ISM Manufacturing reports, and Construction Spending. Meantime, after a spectacular rebound from the June lows, stocks have pulled back. We are still up from the lows (the Dow is up 5.3%, the S&P is up 7.9%, and the Nasdaq is up 11.0%), but that's roughly half of what we were up just a few short weeks ago. But buying stock dips can be quite profitable. That was true in mid-June. And could very well be true again now. If you're looking for stocks that have the potential to soar, but have recently taken it on the chin, be sure to read our latest commentary... Making a Profit from Stock Dips Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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