This morning it’s all about the Employment Situation Report, and the stakes are high, with the SPY and QQQ setting new record highs.  There is a vast uncertainty among the economist’s estimates ranging from 350,000 to 1.2 million.  The big miss in the ADP number on Wednesday will have traders and investors alike at the edge of their seats because anything is possible.  Past that, we have a lighter day of earnings, and with the majority, market-moving earnings behind us, can this massive bull run continue?  Your guess is as good as mine.

Asian markets closed the week with a mixed lackluster performance.  European markets trade bullishly but very near the flatline as they track earnings, rising infection rates, and economic data. Likewise, though we ended trading yesterday, with a very confident surge of buying the U.S. futures appears less certain this morning, trading with modest gains and losses as we wait on the jobs data. 

Economic Calendar

Earnings Calendar

W have a lighter day on earnings with 135 companies listed on the calendar, but a good number of them are unconfirmed small-cap reports.  Notable reports include CGC, CNK, CRON, DKNG, D, FLR, GCI, GT, MGP, NUAN, NCLH, RUTH & SPB.

News & Technicals’

All eyes are on the Employment Situation numbers this morning, and uncertainty is high, with estimates ranging from 350,000 to 1.2 million.  Economists polled by Dow Jones have the number at 845,000, while Econoday’s consensus is 900,000 nonfarm payrolls.  The big miss on the ADP private payrolls and the fact the market is at record highs raises the stakes.  As we wait for the data, Treasury Yields moved higher this morning, with the 10-year trading at 1.236% and the 30-year rising to 1.879%.  The Chinese government-imposed restrictions on tech giants and sectors such as education.  According to Charles Li, the former CEO of Hong Kong Exchange, companies need to get used to the pace of reforms. So beware if you trade in Chinese issues!  The concern is growing that the rising infection rates of nearly 94,000 on a 7-day average will slow the economy as some states consider vaccination passports to enter public spaces such as restaurants, health clubs, theaters etc… 

On the technical front, indexes put on a brave face ahead of the employment data setting new record highs in the SPY and QQQ surging into the close of the day.  The question to be answered is that confidence will hold up after the number at 8:30 AM Eastern?  Economist estimates are all over the place, so get ready for just about anything.  We could have a wildly bullish day if the numbers come in strong, or we could have set an enormous bull trap should they disappoint.  Though we still have a lot of earnings in the coming weeks, the vast majority of market-moving reports will be behind us, and hopefully, the wild price gyrations subside as well.  However, I would not hold my breath with the VIX holding will off its lows as the market sets new record highs.  Volatility could be here to stay, particularly if the market stumbles. So let’s get ready to rumble!

Trade Wisely,

Doug