No. of Recommendations: 1
The ADP jobs report added to a string of soft labor market indicators that have pushed markets closer to pricing in three Federal Reserve rate cuts this year. However, the S&P 500 traded flat, while the Dow Jones Industrial Average edged lower as Salesforce (CRM) weighs following its less-than-stellar outlook.
Initial jobless claims, also out Thursday, exceeded forecasts, though continuing claims pulled back. Earlier Thursday, Challenger, Gray & Christmas reported that layoff announcements jumped 39% from July to 85,979 early Thursday. On Wednesday, the Bureau of Labor Statistics (BLS) reported a bigger-than-expected drop in job openings in July.
ISM Services Index Shows Pick-Up
The Institute for Supply Management reported that its services index rose 1.9 points to 52, moving moderately above the neutral 50 level. While the business activity gauge rose to 55 from 52.6, and the new orders index jumped 5.7 points to 56, the employment index remained in contraction territory, inching up to 46.5.
Fed Rate-Cut Odds Unmoved
Markets have reacted little to the morning's economic data, despite softer hiring and rising jobless claims.
Markets see 97% odds of a Sept 17 Fed rate cut and 44% odds of 75 basis points in cuts at the year's final three meeting, according to CME Group's FedWatch tool. Both are essentially unchanged from before the data.
The S&P 500 remains up 0.2%.
Jeff
