Thursday, October 3rd, 2024
All major market indexes were down today, with Friday morning’s non-farm payroll report directly in sight. Expectations are for decent labor force numbers, as you’ll see below, but the hedge today looks to be against a downward surprise. There is also a major port strike continuing, Middle East tensions overheating and a presidential election that’s still too close to call.
The Dow was down -0.44% today, or -184 points. Aside from the small-cap Russell 2000, it was the weakest performer in the major indexes today. The S&P 500 was -0.17% and the Nasdaq was down a mere -0.04%. The aforementioned Russell lost -0.68% on the session.
ISM Services Strongest in a Year and a Half
This morning’s most important gauge of the Services sector came out today:
ISM Services for September. The 54.99% was much higher than the 51.8% expected, and the 51.5% reported the previous month. This was also the strongest showing from Services sector from this index since February of 2023, a year and a half ago.
Business Activity grew a strong 59.9% versus consensus expectations of +53.3 for the month, while Inventories — the cheapest form of economic growth — came in at +58.1 from +52.9 anticipated. We’ve only seen two months of negative ISM Services prints in the past 12, and we hope to see this continue upward.
Final
S&P Services PMI also hit the tape this morning, with results moving slightly in the other direction: 55.2 was 20 basis points (bps) lower than expectations, as well as 20 bps below the previous month’s headline. Still, the Services sector has long been driving the bus of the American economy, and this does not look to be ending soon.
Factory Orders Negative for August
We go back a little further for today’s
Factory Orders report, this one coming from August. It was understood we’d be coming down from the previously reported +5.0% (now +4.9% on revision, still the hottest print in four years), but to -0.2% from 0.0% anticipated. This is a gauge of real manufacturing, which we know needs to get better.
We feel it shall. Plenty of construction projects in certain regions around the country will eventually lead to higher factory orders and (hopefully) enough manufacturing to keep things afloat, and once we’re there we’re back in a very good situation.
Friday Morning’s Jobs Report: What to Expect
Non-farm payrolls are expected to come in at +150K tomorrow morning — not a great number, but one which would more than cover the amount of current retirees in our aging labor force. It would also be an improvement over the +142K reported last month and mere +89K posted for July.
The past five months of job growth has deteriorated significantly from the previous five months: 122K versus 256K earlier. This lower figure is right around breakeven for covering retiring workers in the Baby Boomer and now Gen-X age groups.
The +4.2%
Unemployment Rate expected is in-line with the previous month. We had been down at +3.7% unemployment to start the year, but began ticking up slowly as 2024 progressed. So far, July’s +4.3% is the high water mark for the year, which is still far below the long-term average of +5.7%.
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Image: Bigstock
ISM Services Jump, Markets Dip Ahead of Jobs Report
Thursday, October 3rd, 2024
All major market indexes were down today, with Friday morning’s non-farm payroll report directly in sight. Expectations are for decent labor force numbers, as you’ll see below, but the hedge today looks to be against a downward surprise. There is also a major port strike continuing, Middle East tensions overheating and a presidential election that’s still too close to call.
The Dow was down -0.44% today, or -184 points. Aside from the small-cap Russell 2000, it was the weakest performer in the major indexes today. The S&P 500 was -0.17% and the Nasdaq was down a mere -0.04%. The aforementioned Russell lost -0.68% on the session.
ISM Services Strongest in a Year and a Half
This morning’s most important gauge of the Services sector came out today: ISM Services for September. The 54.99% was much higher than the 51.8% expected, and the 51.5% reported the previous month. This was also the strongest showing from Services sector from this index since February of 2023, a year and a half ago.
Business Activity grew a strong 59.9% versus consensus expectations of +53.3 for the month, while Inventories — the cheapest form of economic growth — came in at +58.1 from +52.9 anticipated. We’ve only seen two months of negative ISM Services prints in the past 12, and we hope to see this continue upward.
Final S&P Services PMI also hit the tape this morning, with results moving slightly in the other direction: 55.2 was 20 basis points (bps) lower than expectations, as well as 20 bps below the previous month’s headline. Still, the Services sector has long been driving the bus of the American economy, and this does not look to be ending soon.
Factory Orders Negative for August
We go back a little further for today’s Factory Orders report, this one coming from August. It was understood we’d be coming down from the previously reported +5.0% (now +4.9% on revision, still the hottest print in four years), but to -0.2% from 0.0% anticipated. This is a gauge of real manufacturing, which we know needs to get better.
We feel it shall. Plenty of construction projects in certain regions around the country will eventually lead to higher factory orders and (hopefully) enough manufacturing to keep things afloat, and once we’re there we’re back in a very good situation.
Friday Morning’s Jobs Report: What to Expect
Non-farm payrolls are expected to come in at +150K tomorrow morning — not a great number, but one which would more than cover the amount of current retirees in our aging labor force. It would also be an improvement over the +142K reported last month and mere +89K posted for July.
The past five months of job growth has deteriorated significantly from the previous five months: 122K versus 256K earlier. This lower figure is right around breakeven for covering retiring workers in the Baby Boomer and now Gen-X age groups.
The +4.2% Unemployment Rate expected is in-line with the previous month. We had been down at +3.7% unemployment to start the year, but began ticking up slowly as 2024 progressed. So far, July’s +4.3% is the high water mark for the year, which is still far below the long-term average of +5.7%.
Questions or comments about this article and/or author? Click here>>