Wednesday, April 5th, 2023
Pre-market futures are lower again this morning after seeing their mini-rally end yesterday. It’s a heavy week for economic data, most of which thus far has come in cooler than expected. We see more of the same at this hour as the Dow is presently -44 points, the S&P 500 is -9 and the Nasdaq -38 points. Certainly not the end of the world; perhaps this is a little pruning before finding opportunities to work the markets higher.
The March print on private-sector payrolls from Automatic Data Processing (ADP - Free Report) came in below expectations this morning: 145K is a notable miss from the 210K expected and the upwardly revised 261K for February. This amounts to the second sub-200K headline in the three months of 2023 thus far. It is yet another in the string of cooling economic reports we’ve seen so far this week, in what market participants hope will force the Fed’s hand from cranking interest rates ever higher.
The balance between Goods and Services jobs was as close to even as we’ve seen in recent memory: 70K and 75K, respectively. And while Services-oriented Leisure & Hospitality still came in as the #1 industry for job growth last month, we saw a pullback in higher-level Services jobs, like Professional/Business Services (-46K) and Financial (-51K). This last entry would also suggest at least some of the destabilization in regional banking last month is responsible for some of these job losses.
Small companies (< 50 employees) brought in +101K on total private-sector jobs for March, after a past year or so of lower job gains among companies without stock options or extensive healthcare options. Medium-sized firms (50-499 employees) came in with +33K new positions filled and Large companies gained only +10K. Without digging into the numbers too deeply, it may stand to reason these larger firms had the vast majority of recent layoffs — some workers of whom found themselves at a smaller organization.
Also, the U.S. Trade Balance for February was deeper than expected this morning, reaching -$70.5 billion from the estimated -$69.1 billion, and from a more deeply revised -$68.7 billion for January. This headline partly depicts a deeper Goods deficit already reported of -$93 billion. While slightly disappointing, we appear to be off the volatility stream we saw in cycle lows of -$77.2 billion in October of last year and cycle highs of -$60.6 billion the following month.
After today’s open, we’ll see yet more economic data in the form of S&P Services PMI and ISM Services, both for March. In contrast to Manufacturing data we saw from both sources yesterday, these Services prints are expected to remain above the 50-level demarcation point between growth and lack thereof: 53.8 and 54.3%, respectively. The S&P estimate is dead even with the previous month, while ISM’s expectations are 80 basis points lower than the month-ago print.
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Wednesday, April 5th, 2023
Pre-market futures are lower again this morning after seeing their mini-rally end yesterday. It’s a heavy week for economic data, most of which thus far has come in cooler than expected. We see more of the same at this hour as the Dow is presently -44 points, the S&P 500 is -9 and the Nasdaq -38 points. Certainly not the end of the world; perhaps this is a little pruning before finding opportunities to work the markets higher.
The March print on private-sector payrolls from Automatic Data Processing (ADP - Free Report) came in below expectations this morning: 145K is a notable miss from the 210K expected and the upwardly revised 261K for February. This amounts to the second sub-200K headline in the three months of 2023 thus far. It is yet another in the string of cooling economic reports we’ve seen so far this week, in what market participants hope will force the Fed’s hand from cranking interest rates ever higher.
The balance between Goods and Services jobs was as close to even as we’ve seen in recent memory: 70K and 75K, respectively. And while Services-oriented Leisure & Hospitality still came in as the #1 industry for job growth last month, we saw a pullback in higher-level Services jobs, like Professional/Business Services (-46K) and Financial (-51K). This last entry would also suggest at least some of the destabilization in regional banking last month is responsible for some of these job losses.
Small companies (< 50 employees) brought in +101K on total private-sector jobs for March, after a past year or so of lower job gains among companies without stock options or extensive healthcare options. Medium-sized firms (50-499 employees) came in with +33K new positions filled and Large companies gained only +10K. Without digging into the numbers too deeply, it may stand to reason these larger firms had the vast majority of recent layoffs — some workers of whom found themselves at a smaller organization.
Also, the U.S. Trade Balance for February was deeper than expected this morning, reaching -$70.5 billion from the estimated -$69.1 billion, and from a more deeply revised -$68.7 billion for January. This headline partly depicts a deeper Goods deficit already reported of -$93 billion. While slightly disappointing, we appear to be off the volatility stream we saw in cycle lows of -$77.2 billion in October of last year and cycle highs of -$60.6 billion the following month.
After today’s open, we’ll see yet more economic data in the form of S&P Services PMI and ISM Services, both for March. In contrast to Manufacturing data we saw from both sources yesterday, these Services prints are expected to remain above the 50-level demarcation point between growth and lack thereof: 53.8 and 54.3%, respectively. The S&P estimate is dead even with the previous month, while ISM’s expectations are 80 basis points lower than the month-ago print.
Questions or comments about this article and/or its author? Click here>>
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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