After closing above a psychologically important level yesterday, the market’s ability to hold steady will be the focus today. And it will be reports on the health of the employment situation that will be setting the market’s direction.
We have the ADP report today, then the weekly Jobless Claims on Thursday, and most important of them all, the January nonfarm payroll report from the BLS on Friday.
The ADP report came out better than expected this morning, showing the creation of 187,000 private-sector jobs in January. The expectation was for a gain of 143,000. Last month’s number was revised down.
The ADP report has not been doing a good job lately of foretelling the nonfarm payroll number. December was particularly disappointing, as the BLS report came significantly short of what the ADP had reported.
In addition to structural factors, seasonality and weather may be at work in the divergence between these two reports. After the snow dump from last night, we Chicagoans can appreciate the vagaries of Mother Nature. We will have to wait and see what Friday’s BLS report brings.
While we are on the subject of jobs, we got a related report from the earnings front. Manpower, one of the largest staffing firms in the world, came out with better-than-expected EPS and revenue numbers for the fourth quarter. Time Warner also beat EPS/revenue expectations and raised dividend. Hershey came in-line, while Mattel, the maker of Barbie dolls, came ahead. We have Yum Brands! reporting after the close today.
Sheraz Mian
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