Non-Farm Payrolls

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Friday, Sept. 6. The Bottom Line segment of today’s podcast starts at (3:50) for listeners who want to skip ahead.

State of Play

Stocks did nothing again yesterday. It’s been three days of a holding pattern that ends today with non-farm payrolls. As we eye our board of indicators for signs of direction at 0650, risk appetite seems off the table for now:

• Stock index futures are moving lower, led by tech. The Nasdaq is down 1.2% with Broadcom (AVGO 0.00%↑) earnings weighing on the sector. The S&P 500 is down 0.6% ;

• Commodities are showing some signs of life with WTI crude oil up 0.9% to trade close to $70/barrel. Copper is up 0.8%;

• Bonds are seeing a few bids but the yield curve has reinvented. The 2-year yields 3.72%, down 3 basis points, whilst the 10-year yields 3.70%, down 3bps (yields move inversely to prices);

• Cryptos are unchanged. Bitcoin trading around $56,500.

Today’s Known Events

At this point you don’t need to be reminded that last month’s non-farm payrolls sent the market into a tailspin. If they fall well short of estimates again we could be in for a repeat.

The numbers we’re looking for, as anticipated by a survey of economists:

• 164,000 new jobs, a notable improvement from the 114,000 recorded last month;

• This would drop the unemployment rate to 4.2% from 4.3%;

• Private payrolls are expected to increase to 139,000 from 97,000;

• Average hourly earnings are expected to rise 3.7% year-over-year, a small increase from the 3.6% recorded last time;

• Average weekly hours are also expected to increase slightly, to 34.3 from 34.2.