Futures vs FV: SP -2.67; DJ -12.64; NASDAQ -12.86
Stocks are down globally as Asia continues its woes and the US continuing its short fade for NYSE indices and weeklong drop for techs and chips. Futures are not down hard and are up off their lows. NASDAQ futures, however, are not responding upside the past half hour as are the NYSE index futures. That tells you the same pattern remains in place for the open.
ADP jobs: 190K vs 190k exp vs 235k prior.
Manufacturing +40K, a record setting monthly rise -- since the recession.
Zandi says the economy could overheat because of the 'red hot' jobs market. No, the jobs market is finally producing better quality jobs, and those forced into taking wait staff jobs at restaurants can shift out of those jobs into better paying jobs. Indeed that is what you are seeing happen as more people work manufacturing while the eateries lose workers. About time. That is not an economy overheating; that is an economy FINALLY starting to produce real goods and accordingly real jobs.
Q3 Productivity, Rev: 3.0 vs 3.3 exp vs 3.0 first read. The move higher stalled a bit.
Unit labor costs: -0.2% vs +0.2% exp vs 0.5% prior. Wages falling in Q3, but those will improve in Q4 based upon the jobs mix being reported in the jobs reports. As it stands, this is the first back to back quarter of falling wages since 2014.
Other stories are the usual: Tax reform details awaited, Israel embassy to be partially moved, Canada cancelling US fighter jet purchases due to trade issues. The usual.
OTHER MARKETS
Bonds: 2.335% vs 2.353%. Still rising 10 year and flattening yield curve.
EUR/USD: 1.1802 vs 101827. Dollar stronger.
Oil: 56.92, -0.70
Gold: 1267.30, +2.40. Modest rebound.
Futures are soggy, NASDAQ futures a bit more so. Stocks and indices at some support and we again watch for when the bids return.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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