Now this is what a weekday before Labor Day should be like. US stocks barely budge a day after a big selloff, parked between a gloomy take on jobs from ADP and a relatively upbeat assessment of the economy from the FOMC.
Stocks were little changed for most of the day, and at a near standstill in the afternoon, before a late slide takes the indexes into negative territory. DJIA loses 30 to 9281, S&P 500 slips 3 to 995, Nasdaq Comp eases 2 to 1967.
(And I am not kidding you, I said in the newsroom this morning, “I’m going to wait until 3:59 to decide where the market is.” Lo and behold, the market was flat at 3:50 p.m., and down at 3:59.)
Volume’s pretty heavy given the week, with composite volume on the NYSE of about 5.8B shares (and guess which five issues accounted for about a third of that? Yes, the curious quintet of Citi, BofA, Fannie, Freddie, AIG.)
The Dow’s now down four sessions in a row, and lost 3.1% in that time frame. Not exactly correction territory yet, not exactly panic territory, either; for now, just a hiccup.
ADP says August job losses were worse than the market expects. FOMC’s upbeat about prospect that economy’s hit bottom, but it worries about next year.
It’s only fitting stocks kicked off September with a steep selloff. But with stocks flip-flopping between positive and negative territory today, threatening to extend their losing streak to four consecutive sessions, is the summer rally finally over?
September’s historically been the worst-performing month of the year for stocks as summer typically features light trading volume, with money managers coming back to work after Labor Day and adjusting their portfolios before the third quarter ends.
A 50% rally off the March lows on a slew of better-than-expected earnings reports and economic data may make investors even more inclined to take profits now, especially as the sustainability of this rally and an overall economy recovery continue to be questioned.
The queen mother of this week’s data reports is Friday’s nonfarm payrolls report for August. The magnitude of job losses has lessened since the first quarter, when they were well above 500,000 every month, but the total keep rising.
So what we need to see now is a steady trend. Because we haven’t had one yet.
The US shed 247,000 jobs in July, the Department of Labor reported. That nearly slashed in half June’s 443,000 slide. If August’s report comes in under the 247,000, it will confirm in most people’s minds that a trend’s formed, and, even if the numbers are still negative, a recovery’s coming. The key is for August’s losses to come in below 247,000.
That’s what the market is expecting. But the first high-profile reading on jobs, from ADP this morning, was worse than July’s numbers. ADP estimates the nation shed 298,000 jobs in August. And TrimTabs, an outfit that doesn’t carry a lot of water on this subject but that tallies the numbers anyhow, pegged August’s losses at 335,000.
Those are just estimates, and TrimTabs especially has routinely put the losses at wider numbers than the official count, but if the Labor Department reports a number materially worse than 247,000, it will be hard to argue a bottom’s been hit in unemployment.
US stocks poised to open basically flat following yesterday’s rout, based on indications from premarket equity futures. Financials led the weakness yesterday, and there’s some premarket carryover selling in names like BofA and AIG.
Stocks are down aboutthree percent over the past three session, despite some good news on Monday and Tuesday. One thing seems pretty clear in light of the economic data yesterday — the preponderance of the good news is priced in.
Full slate of info for investors to digest today, including ADP’s August employment estimate. The firm pegged private-sector job losses at 298,000, worse than the 213,000 it was expected to report. Also on tap is revised 2Q productivity reading at 8:30 am; July factory orders at 10:00 am; and minutes from August FOMC meeting out at 2:00 pm.
S&P futures down 2.30; DJ futures down 19. Ten-year also flat, yield at 3.37%.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
The bridge that collapsed on Interstate 5 bridge over the Skagit River in Washington was listed as “functionally obsolete” and “fracture critical,” which means the whole sha-bang could come tumbling down if one major part fails. Click here to read the details from USAToday. This sort of thing shouldn’t be happening in a modern, developed nation. Barry LePatn […]
