Morning Minutes 9/3/2020

Morning Minutes

Stocks Slip Despite Positive Employment Numbers

September 3, 2020

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

Coming off gains of 1.0%-1.5% for US markets in Wednesday, US index futures are down slightly with Dow futures flat and NASDAQ futures down 1.0% as investors digest this week’s market action and economic news. Overseas, the Das is up 0.9%, while the FTSE is up 0.4%. Commodities are also backsliding today with crude oil down 2.0% and copper down 1.2%. Gold and silver continue to slip, falling another 0.2% this morning.

With the Labour Day weekend approaching, investors remain focused mainly on economic news. Service PMI reports from around the world have been mixed. So far, China and Germany have exceeded expectations, while the UK, France, Italy and Spain fell short. Today’s US non-manufacturing PMI report is due at 10:00 am EDT. The street is expecting the headline number to be unchanged at 54.8. As with the manufacturing report on Tuesday, the forward-looking new orders component may attract more attention (street 56.5 vs previous 67.7).

Today’s US jobless claims report was significantly better than expected. Initial claims of 881K were better than the 950K the street had expected and down significantly from 1,011K last week. Continuing claims fell to 13.254M, which was better than the 14.0M street estimate and last week’s 14.492M.

Tomorrow brings employment reports for the US and Canada. The street is expecting an increase in US nonfarm payrolls of 1.4 million jobs, down from 1.763 million jobs in July. The US unemployment rate is expected to dip back under 10.0% to 9.8%. Canadian job growth is expected to slow to 275K from 418K last month, with the unemployment rate expected to fall to 10.1% from 10.9% last month.

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