Markets are mixed this morning as investors digest a new round of economic reports. While not quite as strong as Monday’s Manufacturing PMI reports, Service PMI reports from major countries around the world have also come in better than expected pretty much across the board.
US ADP Private Sector Payrolls increased by 122K, above the Street estimate of 117K. The stronger payroll report appears to have reduced pressure on the Fed to cut interest rates, contributing to a move higher in Treasury yields and the US Dollar. The US 10-year Treasury note yield is climbing toward 4.50%, while the US 30-year Treasury note yield is climbing toward 5.00%.
US equity futures are mixed, with NASDAQ futures up 0.2% and Dow futures down 0.3%. Overseas, the Nikkei rose 2.5%, while the Hang Seng fell 1.6%. In Europe, the DAX is down 0.9% and the FTSE is down 0.4%.
Commodity markets are also mixed. Crude Oil is up 2.7%, trading above $96.00/bbl, and Gasoline is up 1.3% as another day of US-Iran talks has dragged on with no tangible developments. Gold is down 0.7%, Copper is down 1.1%, and Silver is down 1.1%.
The US Dollar is climbing against other currencies today, with the Euro down 0.3% and the Loonie down 0.2%.
Focus this week remains on economic news. US ISM Services PMI, where the Street is looking for 53.8, is due at 10:00 am EDT, along with US Factory Orders, where the Street is looking for 4.6%. The Fed’s Beige Book report on regional economic conditions in the US is due at 2:00 pm EDT today. Chipmaker Broadcom* reports earnings after the close.
*Shares of Broadcom are held in some portfolios managed by SIA Wealth Management.