US equity markets continue to work on a base as stock indices logged another largely sideways move yesterday. All three majors gained fractional ground on mixed volume. The Dow Industrials (+0.49%), S&P 500 (+0.15%) and NASDAQ (+0.12%) managed to squeak out gains. Volume on the NYSE rose incrementally (0.32%) but fell sharply on the NASDAQ (-10.98). Internals were flat.
Themes:
Crude slips a relatively tame 2%
Earnings, largely constructive with several major misses
Gold continues to outperform equities as the risk adverse vehicle of choice
Rising labor costs impacting profits in a slow growth landscape
Probability of a rake hike in March falls to 10%
Demand for treasuries suppresses yields
Industrials, Technology and Financials provided sector leadership while Consumer Discretionary was hit hard.
Yesterdays Economic Calendar began with the Challenger Job-Cut Report. In January, announced layoffs jumped to 75,114 from December’s 23,622. Weekly Jobless Claims ticked higher to 285k from the prior week’s revised 277k. Nonfarm productivity slipped to -3.0 while Unit Labor Costs were in line at 4.5%. The Bloomberg Consumer Comfort Index was 44.2 versus the prior week’s 44.6. Finally, Factory Orders, not surprisingly, contracted by 2.9% in the month largely as a result of a stronger US dollar and tepid global demand growth.
Today’ Economic Calendar will be dominated by the Employment Report. Consensus is calling for a gain of 188k, an unchanged unemployment rate of 5.0% and a small tick higher in the Average Hourly Earnings of 0.3%. International Trade will speak to dollar strength and weak demand while we should see another tick lower in the Baker-Hughes Rig Count.