Thursday's Market Minute: What To Watch For Into The End Of The Week…

With the recent China crackdown on businesses, COVID numbers on the rise, and countries like Australia being forced back into lockdown, U.S. indices still remain at or near all-time highs and are a textbook example of how investors continue to focus on the positive and shrug off the negative. But after the disappointing ADP report yesterday, the focus will be on labor conditions here in the U.S. as we head into the end of the week.

This morning, keep an eye on Weekly Jobless Claims due out at 8:30am ET; expectations are for them to dip back below 400K, but seasonal factors associated with the auto industry could skew the numbers a bit. Earlier this morning, the Challenger Job Cut report showed a decline from last month’s 20,476 to 18,942. While the weekly data and the ADP are closely watched, the real focus into the end of the week will be the nonfarm payrolls and the Employment Report as a whole due out Friday. Expectations are for the unemployment rate to dip to 5.7% from last month’s reading of 5.9% and for nonfarm payrolls to come in around 900K, up slightly from the 850K reported in July. As employers have been forced to provide incentives to lure workers back into the workplace, it will also be key to keep an eye on average hourly earnings and any possible spike that would feed into inflation concerns.

With the Fed focused on the labor markets, as traders and investors, we need to be as well; the data due out this week will provide further insight as to how well the economy is recovering from the pandemic; a big measure of that recovery is labor conditions. Headed into the data due out tomorrow, treasuries and the VIX remain at somewhat elevated levels, a sign investors remain a bit on edge. Stay nimble, trade well.

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