Friends
We had a lot of news and data points this morning, beginning with interest rate cuts by the ECB in Europe (cut its key rate by 25 bps) and also in China where they cut their lending rate and their deposit rate. Then we got a better than expected ADP private sector job number (which caused some economists to raise expectations for tomorrows non-farm payroll number- instead of about 90,000 new jobs the expectation is more like 120,000 or so). We also got a slightly better weekly jobless claims number. After that we got the June ISM non-manufacturing number which came in at 52.1, and while not great, at least it was not as disastrous as Monday’s ISM manufacturing number of less than 50.
With so many data points, traders couldn’t decide if good news was bad news (less Fed QE) or vice versa. We have seen this movie before. Stocks drifted throughout the day from negative to positive territory finally settling in the former. For the day, the Dow Jones Industrial Average was down 47 points to close at 12,896. The S&P 500 was down 6 points to finish the day at 1367. Gold was down $17 to trade around $1604 per ounce, and oil was down $.76 to settle around $86.90 per barrel WTI.
We suspect that tomorrow’s non-farm payroll report will spark a move one way or the other. But of course, traders will be left to determine whether a good number is really good news or vice versa (no more QE). Of course last month’s bad number sent stocks reeling, so we’ll just have to wait to see how traders interpret the news. We’ll let you know how it plays out.
Have a nice evening everyone.
