Treasuries were buffeted by mixed indications on jobs. At the time of this writing, the market is still suggesting at least two interest rate cuts this year.
The ADP Private Sector Employment report fell short of the median forecast of 51,000 jobs created. The data suggested only 41,000.
Another employment indicator, JOLTS job openings for November was also weaker than anticipated however the ISM gauge of service sector activity in December employment survey indicated that jobs unexpectedly expanded for the first time since May.
What data point will more closely correlate with tomorrow’s release of the December BLS report. This report may take on increased significance given it is the first employment report that may be absent from any noise for the first time since September, noise the result of the government shutdown.
Commenting about equities, big tech cautiously rallied digesting mixed economic data and shifting geopolitical risks. Optimism however is high that there will be solid earnings growth and an accommodative Fed.
Last night the foreign markets were down. London was down 0.30%, Paris down 0.24% and Frankfurt down 0.14%. China was down 0.07%, Japan down 1.63% and Hang Seng down 1.17%.
Futures are down about 0.3% as tech shares are showing nominal weakness. Defense stocks however are soaring as the President signaled plans to increase military spending. The 10-year is off 2/32 to yield 4.16%.
Kent Engelke
Chief Economic Strategist Managing Director
The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. This material is being provided for informational purposes only. Any information should not be deemed a recommendation to buy, hold or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. This report is not a complete description of the securities, markets, or developments referred to in this material and does not include all available data necessary for making an investment decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. If you would like to unsubscribe from this e-mail distribution, please reply to this e-mail and indicate that you wish to unsubscribe in your response.
