Morning Minutes

Stocks Slide Despite Positive Employment News




US index futures have turned downward this morning with Dow Futures down 0.7% and NASDAQ futures down 1.1%. Overseas markets are also under pressure with the FTSE falling 1.5%, the Dax slipping 0.7%, and the Hang Seng dropping 1.1%. Commodities are also under pressure today with copper down 1.75%, while WTI crude oil is down 0.2%.

These declines come despite a series of positive economic announcements. US ADP private sector payrolls for April were spectacular (950K vs street 650K), which along with better than expected US weekly initial jobless claims (385K vs street 395K and previous 405K), indicates a healthy job market in the US. Meanwhile in Europe, several Service PMI reports beat expectations including Italy (53.1 vs street 52.5) and the UK (62.9 vs street 61.8).

Its a light day for corporate news with volatile trading in meme/Reddit stocks stepping into the vacuum. AMC Theatres is down 8.8% premarket today after soaring 95% yesterday and after the company filed to sell 11 million shares at some point in the future.

Tomorrow brings more North American employment news. US nonfarm payrolls are expected by analysts to rise by 644K, up from 266K last month with today’s US job numbers increasing the potential for a positive surprise. In Canada, a decline of 20K jobs in May is widely expected adding to April’s job losses of 207K as widespread lockdowns maintained their stranglehold on the Canadian economy.  

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Colin Cieszynski, Chief Market Strategist

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

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