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Market Waiting For Friday's Spending Bill And Employment Report
The markets pulled back yesterday as traders brace for a flurry of news at the end of the week.
While there's great enthusiasm for a final tax cut bill getting to the President's desk by Christmas, there are a few events that have traders a bit cautious this week.
We have the spending bill deadline this Friday (Dec. 8th) to avoid a government shutdown.
And we have the always important Employment Situation report (last one for the year) also due on Friday.
Additionally, there's been plenty of chatter lately that President Trump might recognize Jerusalem as Israel's capital this week. This could be met with widespread protests. There's little correlation between that and the market. But unrest of any sort, especially when the market is already on edge for other things, isn't great.
But the spending bill deadline and the employment numbers are really the key issues this week with the spending bill getting top billing.
In other news, yesterday's Redbook numbers showed a y/y rate of change of 3.0%. This was down from last month's print of 4.8%.
The PMI Services Index slipped to 54.5 from last month's 55.3. But came very close to expectations for 54.7. In spite of the slight downtick, analysts commented that it still showed solid growth with new orders at a 3-month high.
The ISM Non-Manufacturing Index saw the same thing, ticking down to 57.4 from last month's 60.1, and just missing views for 59.0. Analysts once again pointed to the 'very strong rate of growth' in spite of the slight pullback. The highlighted components continue to be new orders, employment, and backlogs.
After the last couple of fantastic weeks we've had, a small pullback is no big deal. And it's actually quite healthy.
There might be some chop until we get past this week's events. But I'm still expecting green arrows by month's end.
See you tomorrow,
Kevin Matras
Executive Vice President, Zacks Investment Research
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The markets pulled back yesterday as traders brace for a flurry of news at the end of the week.
