Jobless Claims, Non-Manufacturing PMIs

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, Oct. 3. The Bottom Line segment of today’s podcast starts at (2:57) and Stocks on the Contrarian Radar©️ feat LEVI 0.00%↑ at (4:36) for listeners who want to skip ahead.

Read this month’s portfolio update letter here. Just published last night.

State of Play

Stocks tread water yesterday, barely moving despite geopolitical tensions in the Middle East and the ongoing longshoremen strike. As we eye our board of indicators for signs of direction at 0630, risk appetite appears to be retrenching a bit:

• Stock index futures are pointing to a lower open with small caps leading the drop. The Russell 2000 is down 0.8%. S&P 500 and Nasdaq futures are down 0.3% each;

• Commodities are mixed. Crude oil has resumed its rally, with WTI up 2% to trade close to $72/barrel. But copper is down 1.3%;

• Bonds are seeing a tiny bit of selling with the 2-year yield up 2 basis points to 3.66% and the 10-year up 3bps to 3.82% (yields move inversely to prices);

• Cryptos aren’t doing anything. Bitcoin is flat trading around $60,700.

Today’s Known Events

Initial jobless claims are out at 0830. Economists who participated in the survey expect 221,000 new claims, a slight uptick from the 218,000 recorded last week. This is a crucial indicator on the labor market so an outlier one way or another could move markets.

We’ll then get ISM non-manufacturing (read: services) PMIs at 1000. The expectation here is for a reading of 51.6, effectively unchanged from last month’s 51.5 and still north of the 50 line that separates expansion from contraction.

Factory orders are also out at 1000. The expectation here is for an increase of 0.1% after a 5.0% rise last month (can that be right?).