Stocks should be able to recoup some of the losses from the day before following the reassuring labor market reading from payroll processor Automatic Data Processing (ADP).
The stock market took it on the chin on Tuesday as confusion about the intricate details of the Greek bond swap and the potential for a disorderly default took center stage. The issue is still there given the Thursday deadline for the deal, but the shift in focus today to the domestic labor market should help calm nerves to some extent.
A total of 216K private sector jobs were in created in February according to ADP, matching expectations. The jobs numbers for January were revised upwards by 3K to 173K.
The gains were broad-based across industries and business sizes. More than half of the January job gains came from small businesses with less than 50 employees. Medium-sized businesses, those with less than 500 employees, accounted for most of the rest of the gains. Construction added 16K during the month, in-line with recent indicators of improving health in the sector in the shape of housing starts and builder confidence. The overall mild weather across broad swaths of the country also likely helped the construction gains.
The ADP tally sets the tone for Friday’s government jobs report, which is expected to show headline job gains of around 213K. Today’s ADP report indicates that the headline print on the Friday non-farm payroll report from the Bureau of Labor Statistics (BLS) will likely be tad lower than current expectations of about 213K.
The overall trend on the labor market front remains favorable as confirmed by the steady downtrend in the weekly Jobless Claims data and improvement in the employment components of the ISM surveys.
In corporate news, Apple (AAPL) is coming out with the latest iteration of the iPad tablet. It will be interesting to see if this product launch will help stem the recent weakness in Apple shares. Pandora Media (P) will also be in the spotlight today following the company’s weaker-than-expected results and guidance after the close on Tuesday.
To read this article on Zacks.com click here.
Zacks Investment Research
