ADP Payrolls, Jobless Claims

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, Sept. 5. The Bottom Line segment of today’s podcast starts at (3:36) for listeners who want to skip ahead.

State of Play

Stocks meandered around yesterday, not really moving much. As we eye our board of indicators for signs of direction at 0645, all is quiet ahead of some data releases about the labor market:

• Stock index futures are flat, with no major US index moving more than 0.2% from the break-even point;

• Commodities aren’t doing much either. WTI crude oil appears to have settled in below $70/barrel, trading around $69.50. Copper is unchanged;

• Cryptos also unchanged. Bitcoin is trading around $56,700;

• Bonds also flat. The yield curve has officially uninverted, with the 2-year and 10-year both yielding 3.77%.

Today’s Known Events

Some more data on the labor market is incoming.

ADP Nonfarm Employment Change is out first, at 0815. This is often ignored because it doesn’t have much of a relationship with the government’s official figure released tomorrow. But in times like these with the labor market as important as it is, investors are likely to react to any and all data points.

Economist who were surveyed expect 143,000 new jobs, an increase from the 122,000 recorded last month. This would put it right in line with the number required to keep the unemployment rate steady, according to our guest this week.

Then we’ll get initial jobless claims at 0830. The expectation here is for 231,000 new claims, identical to last week’s number and right in line with the four-week average which is 229,000. Continuing jobless claims are expected to remain steady at 1.87 million.

We also get ISM Non-Manufacturing PMIs at 1000. The expectation here is for a reading of 51.2, effectively unchanged from last month’s 51.4 and north of the 50 line that separates expansion from contraction. Speaking of employment, we can expect the employment figure from ISM’s survey to be closely watched as well. There’s no economist survey for this but last week it came in at 51.1.

There are some earnings. The interesting ones aren’t until after the close: Broadcom (AVGO 0.00%↑), UiPath (PATH 0.00%↑), Samsara (IOT 0.00%↑), and DocuSign (DOCU 0.00%↑).

The Bottom Line

Looks like we’re in a bit of a holding pattern, potentially until non-farm payrolls tomorrow morning. Ever since Monday’s sell-off things have gone absolutely nowhere.

A good opportunity to listen to the latest guest episode. This is timely as we discuss Friday’s payrolls number as well as other pertinent things. We recorded yesterday afternoon and the episode was quickly edited and published for you premium subscribers only:

Unemployed men queued outside a depression soup kitchen opened in Chicago by Al Capone, 1931. Photographer unknown. Source: Wikimedia Commons