Morning Minutes

June Begins with Strong ADP Payrolls Offsetting Soft Earnings and Guidance




US index futures are holding steady this morning, with the main contacts trading between -0.1% and +0.1%. Over in Europe, the Dax is up 0.8% and the FTSE is up 0.4%. Copper is bouncing back today with a 1.4% gain, while WTI Crude Oil is up 0.1% and Gold is down 0.2%.

The US debt ceiling deal passed the House of Representatives overnight and is now off to the Senate for a vote. This shifts the main area of concern for investors away from politics and back to economic and earnings news which has been mixed.   

Today’s US employment numbers have been positive. ADP Payrolls (278K vs street 170K), and Weekly Initial Jobless claims (232K vs street 235K) both beat expectations. This sets the stage for tomorrow morning’s US Nonfarm Payrolls report (street 190K vs previous 253K). Wage inflation, in the form of Average Hourly Earnings (street 4.4%) may also attract attention as investors try to figure out whether the Fed may pause interest rate hikes at this month’s meeting.

Overnight earnings, sales and guidance numbers have been getting mixed reviews from the street. Nordstrom is up 5.1% premarket after posting a surprise profit (+$0.07 vs street -$0.10). Macy’s, however, is down 3.5% premarket despite beating earnings expectations, as sales disappointed and management cut guidance for this year. Similarly, concerns about sales at Salesforce despite positive earnings have sent its shares down 7.3% premarket. After the close today, results are due from Broadcom* and lululemon athletica.

*Shares of Broadcom are held in portfolios managed by SIA Wealth Management.

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Colin Cieszynski, Chief Market Strategist

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

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