I am waiting
Stock index futures point to a lower open on Thursday, but sentiment will likely dictate a batch of jobs numbers due this morning.
S&P Index Futures (SPX) -0.6%Futures contracts for the Nasdaq 100 Index (NDX: IND) -0.7% Dow futures (INDU) -0.6% were less.
10-year Treasury yield (US10Y(Increased 6 basis points to 4.01%, yielding 2 years)US2Y) rose 9 basis points, to 5.04%.
Wednesday’s Fed meeting minutes reinforced the market’s conviction for a rate hike in July. Fed funds futures contracts are priced at 90% chance up a quarter of a point.
“The Fed’s minutes appear suitably hawkish – in tune with the market’s mood lately,” ING said. “The Fed paused in June, but some participants were in favor of raising rates.”
On the economic front, job cuts fell 49% in June to 40,709 from 80,089 in the Challenger’s job cuts report.
The ADP jobs report also came in at 497K, well above the expected number of 228K.
“Since last August, when the new methodology was introduced, ADP has reported an overall increase of 2.27 million in private payrolls, 380,000 less than the official measure,” said Ian Shepherdson of Pantheon Macro. “It’s still too early to tell whether this short of target reflects some kind of enduring negative bias in the ADP methodology or is just hype, and note that in the last couple of months ADP has been slightly stronger than the official numbers.”
Weekly Jobless Claims came out shortly after with an expected rise to 245K.
“We believe the decline in claims last week is noise rather than a sign of a re-tightening of the labor market,” Shepherdson said. “Monday, June 19th, was the June holiday, so most state unemployment offices are closed.”
After trading begins, the Job Opportunity and Employment Turnover Survey, or JOLTS, for May is due. The consensus for employment is down to 9.935 million.
“These are not job postings, but externally advertised job vacancies. This number has been bolstered by job hopping/facing a post-pandemic midlife crisis,” said Paul Donovan of UBS. “As that calms down, the vacancy rate should go down. Hardly anyone bothers to take part in the survey, which undermines the value of the results.”
Service sector numbers are also on the calendar after the opening bell.
The S&P Global Services PMI for June is expected to decline to 54.1. The ISM Services Index is expected to rise to 51.
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