The futures markets were in the green ahead of the latest Employment Report by Automatic Data Processing (ADP). This report showed that around 152,000 jobs were added in May. Most of the job gains came from the service sector, with significant increases in transportation (up 55,000 jobs) and education (up 46,000 jobs). Economists had been predicting a more-significant slowdown in the job market. Overall, the major market indices moved little on the news, suggesting a positive start to the trading day. Elsewhere in the market, shares of Hewlett Packard Enterprises (HPE), a provider of hardware and software for cloud infrastructure, are up significantly on better-than-expected quarterly earnings results. Later today, the Institute for Supply Management's Services Index will be reported once the session begins, which may well impact trading.
After several lackluster trading days, the markets showed signs of recovery yesterday. The major market indices, while volatile throughout Tuesday’s session, managed to end on a positive note. The S&P rose eight points (up 0.15%), the NASDAQ climbed 28 points (up 0.15%), and the Dow Jones Industrial Average finished up 140 points (up 0.36%). Market breadth was slightly negative, with decliners outpacing advancers by a 1.6-to-1.0 ratio, but overall market sentiment seemed to improve. Notably, REITs performed well. However, materials stocks didn't fare as well and were among the weakest performers yesterday.
In the commodity market, oil prices stabilized at lower levels after a week of price declines triggered by OPEC's decision to gradually increase production. This reversal of OPEC's previous output cut agreement has raised concerns among traders about potential oversupply, adding to market volatility. Elsewhere, U.S. Treasury Bond yields declined as traders sought the safety of that asset class and pushed up pricing. The Chicago Board Options Exchange Volatility Index, or VIX, also known as the fear index, ended the day flat after a choppy session.
A few economic reports are slated for release later this week. These include initial jobless claims and the final revision of U.S. productivity on Thursday, while the U.S. employment report for May and the unemployment report are due on Friday. A few dozen companies will release their quarterly earnings in the days ahead, though we are largely out of earnings season. - John E. Seibert III
At the time of this article’s writing, the author held positions in one or more any of the companies mentioned.
CLICK HERE for more information on our services or call 1-800-VALUELINE (1-800-825-8354). Our account managers are available Monday through Friday, 8:00 AM to 6:00 PM Eastern Time.
