US index futures are down 0.3%-0.4% this morning giving back some of yesterday’s 0.4%-0.8% gains, dragged downward by mixed employment news. At the national level, the news has been positive with ADP private sector payrolls (235K vs street 150K) and weekly initial jobless claims (204K vs street 225K).
This has added to speculation that the Fed may keep interest rates higher for longer as indicated in yesterday’s FOMC minutes. On this news, the US 10-year treasury note yield has climbed back up to 3.75%, while the US Dollar has rebounded with gains of 1.0% against the Pound, 0.5% against Gold and 0.3% against the Canadian Dollar and the Euro.
Meanwhile on the corporate side, the news has been negative, with Amazon announcing 18,000 layoffs which was more than expected, and Salesforce.com announcing plans to lay off 10% of its staff. Bed Bath and Beyond has been hit the hardest this morning down 17.8% on reports of potential financial troubles at the housewares retailer.
US nonfarm payrolls (street 200K vs previous 263K) and Canada job growth (street 8K) are due at 8:00 am EST tomorrow. In addition to the headline numbers, investors may also turn their attention to the wage inflation reports for both the US (average hourly earnings, street 5.0%) and Canada (average hourly wages, previous 5.4%) for indications of whether the pressure on North American central banks from wages to remain hawkish has changed at all.
Commodity markets are very mixed again today. In energy trading WTI Crude Oil has bounced 1.9% but remains below $75.00/bbl, while Natural Gas has dropped back under $4.00/mmbtu with a 5.8% decline. Metals action is mixed with Copper up 2.1% but Platinum down 1.1%.
