Investor Defensive Alert: Weak Job Numbers Expected Today

S2S1PPR1R2Daily changeLastIndex
     (-0.21%)19,899DJX
225.05225.73226.15226.83227.25(-0.08%)2,269SPX
119.79120.33120.64121.18121.490.20%5,488Nasdaq

The Nasdaq succeeded in breaking up to a new historic high with support from Amazon (AMZN), while sharp losses in retail stocks like Macy’s (M), Kohl’s (KSS), and other sector players weighed on the market at large. U.S. stocks have seen hesitation over the last 3 weeks on the heels of a sharp surge in stock prices that began with the election of Donald J. Trump on November 8th, investors hopeful that the president-elect would stimulate the economy with a combination of tax cuts and massive infrastructure spending.

Many on Wall Street want to see evidence that Trump’s campaign pledges will be seconded by the Republican dominated Congress – and come to fruition. The market is halting for the right reason; it’s waiting to see if Washington gets Trump’s back.

The stock of the department store chain, Macy’s (M), fell 13.89%, while Kohl’s (KSS) tumbled 19.02% after the two said that holiday sales had fallen more than expected. The sales warnings sent shock waves that swept through other industry players, Nordstrom (JWN) falling 6.87%, J.C. Penney (JCP) tumbling 7.2%.

At the same time, the online retail powerhouse, Amazon (AMZN), whose forte is appealing to traditional department store clientele, soared 3.07%, helping push the NASDAQ to a new record closing high.

In summary for the day, the NASDAQ rose 0.2% to the 5,487.94 point level, just less than a point off of its intraday high set on December 27th. The Dow Jones shed 0.21%, the S&P 500 ending off by 0.08%. Financial stocks (XLF) recorded the day’s sharpest losses, ending off by 1.02% with substantial losses in large banking stocks like Wells Fargo (WFC), J.P. Morgan (JPM) and Bank of America (BAC).

One factor adding to the selling pressure was employment figures. The ADP survey pointed to fewer than expected positions being produced in the private employment sector in the month of December. The report is seen as a preview of the broader official employment report that will be released today, which will include both the private and public sectors.

All-in-all, the American economy is seen by many economists as being close to full employment, a factor that is likely to help both firm earnings and therefore, stock prices as well, while the Q4 earnings season will begin over the coming weeks. If we see a 5%-10% price correction in the stock market, most investors will be willing to buy in, seeing that the fundamental background is still rather good and improving before our very eyes. This is apparently the best economic environment inherited by any incoming president in the last 20 years.

On the energy front, crude changed direction over the course of yesterday’s trading, after news broke about a cut in Saudi production, lifting investors’ spirits. Crude prices had toppled earlier in the trading day after the weekly crude reserve figures showed a surge in gasoline and distillate inventories, despite a sharp fall in crude inventories. Gasoline inventories rose by 8.3 million barrels, with distillate inventories soaring by 10.1 million barrels. Crude ended yesterday’s trading up 0.9% at the $53.76 barrel level.

Gold soared to a 5-week high on the background of the decline in the U.S. dollar, coupled with investors’ take on the latest Fed minutes, which underscored higher chances of a faster rate hike pace in order to offset inflation.

On the S&P 500, 17 stocks rose to new 52-week highs, without a single stock dipping to a new yearly low; on the NASDAQ, 86 stocks recorded new 52-week highs, 15 falling to new yearly lows.

About 7.2 billion shares changed hands on U.S. exchanges, above the 6.8 billion average over the last 20 trading days.

Friday: If employment figures fall short of forecasts, that won’t be a surprise for bond traders who are pricing in weak December employment figures in the wake of yesterday’s ADP report which showed that just 153 thousand new positions were added to the private sector, beneath the earlier projected figure of 175 thousand. Economists are expecting today’s official employment report to be released before trading opens at 8:30 N.Y. time to register 178 thousand new hires for the overall economy. The unemployment rate is expected to rise slightly to the 4.7% level, hourly wages expected to climb by 0.3%.

Besides employment figures, international trade figures will be released at 8:30, with factory order numbers coming out at 10:00.

Friday’s Hot Stocks: GPS, AMGN, HELE, SHAK, GBX

Have a great trading day!

Economic Calendar
DAYTIME (EST)EventForecastImpact
Thursday8:15ADP Employment Change170KHigh
Thursday8:30Initial Claims265KHigh
Thursday10:00ISM Services56.6Medium
Thursday11:00Crude InventoriesLow
Friday8:30Nonfarm Payrolls175KHigh
Friday8:30Unemployment Rate4.7%High
Friday8:30Trade Balance-$42.2BMedium
Friday10:00Factory Orders-2.1%Medium

 

 

Earnings Calendar
SymbolCompanyAM/PMDay
YUMYum! Brands, Inc.PMWednesday
MONMonsanto CompanyAMThursday
STZConstellation Brands, Inc.AMThursday
WBAWalgreens Boots Alliance, Inc.AMThursday
WMSAdvanced Drainage Systems, Inc.AMThursday
HELEHelen of Troy LimitedPMThursday
PSMTPriceSmart, Inc.PMThursday
GBXThe Greenbrier Companies, Inc.AMFriday

 

AM – Before Market Open

PM – After Market Close

6.1.2017

Today’s Picks – Day Trading

SymbolBreakoutBreakdownMomentumMomentum
CLVS47 ALXNKSS
TRGP59.35 SINAM
VRTX79.67 MOMOLB
HRTX 12.30BABADISCA
ACIA 60YYACN
RH 30HASSIG
   BIDU 
   AMZN 
   DLR 

 

#DateStockLong\

Short

StatuesDate CloseProfit \ Loss#DateStockLong \ShortStatuesDate CloseProfit \ Loss
15.12.2016CSCLongClose6.12.2016-1.62%17      
26.12.2016YYShortClose7.12.2016+0.72%18      
37.12.2016ROSTLongClose14.12.2016+0.42%19      
49.12.016TWLOShortClose13.12.2016+2.01%20      
512.12.2016PDCOLongClose14.12.2016+0.48%21      
613.12.2016TLRDLongOpen22.12.2016+1.87%22      
713.12.2016IGTShortClose14.12.2016-0.19%23      
814.12.2016CCLongClose21.12.2016+0.52%24      
929.12.2016JWNShortOpen +3.52%25      
10      26      
11      27      
12      28      
13      29      
14      30      
15      31      
16      32