Jobs In Focus | Morning Express 07/08/22

Posted: July 8, 2022, 7:51 a.m.

- Nonfarm Payrolls for June due at 7:30 am CT. Expectations are for 268k jobs created (down from 390k in May). Wage Growth to rise 0.3% MoM (flat from May) and 5.0% YoY (down from 5.2% in May). The Unemployment Rate is expected to be flat.

- Last Friday’s ISM Manufacturing showed a worsening in response for Employment at 47.3 in June, down from 49.6 in May. Analysts expect 15k Manufacturing jobs, down from 18k in May when 40k was expected.

- ISM Non-Manufacturing on Thursday also showed a worsening Employment component at 47.4 versus 50.2 in May.

- With June being the onset of summer, the leisure and hospitality service industry would foreseeably be hiring. These summer positions are likely lower paying jobs on average and could drag on Wage Growth.

- Four out of the last five headline Job Growth numbers beat. We imagine there will be at least one bad Nonfarm Payroll Report this summer. Given the ISM Employment component for each, this could be it.

- Initial Jobless Claims have missed expectations for five straight weeks, lingering at the highest level since February.

- Considering the Jobless Claims, ISM Employment Components and potential seasonal hiring, this would drag on both Job and Wage Growth. Delivering a potentially bullish report for risk-assets as it weighs on the U.S. Dollar.

- Regardless, when critical economic data misses largely, there is always a fear it can take risk-assets down broadly on recession fears. Stay nimble.

- Into and through the weekend, traders must keep a close eye on Shanghai virus testing and a pickup in cases. We believe markets began pricing this in on Tuesday, when news broke the government will begin mass testing; if you test, you will find cases. However, there is certainly a headline impact risk on everything from equities, energies, to copper and other metals. Prepare accordingly.

 

Do no miss our daily Midday Market Minute. In yesterday’s edition, Bill Baruch touched on jobs, and Natural Gas as well as the usual suspects.

E-mini S&P (September) / NQ (September)

S&P, yesterday’s close: Settled at 3905, up 56.75

NQ, yesterday’s close: Settled at 12,138.50, up 258.25

 

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NQ (September)

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Crude Oil (August)

Yesterday’s close: Settled at 102.73, up 4.20

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Gold (August) / Silver (September)

Gold, yesterday’s close:  Settled at 1739.7, up 3.2

Silver, yesterday’s close: Settled at 19.188, up 0.029

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Silver (September)

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