Market Focus Shifts Back to Jobs
Today’s Spotlight Market
The S&P 500 had a choppy session yesterday, after surging to record levels on Tuesday.? Monday and Tuesday were extremely turbulent trading sessions, led by fear that Russia was prepared to launch a full-scale military action.? On Tuesday, a statement by Russian President Vladimir Putin that invading the Ukraine was the final option helped quell fears for stock traders.? There is, however, an air of uneasiness among traders, which will only dissipate once the matter is resolved.? The apparent softening of rhetoric does afford traders the luxury of being able to refocus their attention to economic data instead of geopolitics. ?
Fundamentals
The ADP National Employment Report set a negative tone for equities in pre-market trading.? The report showed the private sector adding 139,000 jobs in February, which fell short of analyst estimates of 150,000 jobs added.? The January numbers were also revised down from a healthy 175,000 jobs added to a less than impressive 127,000 figure.? This could be setting-up for a potentially disappointing non-farm payroll number on Friday, but it is important to note that the two reports do not always have the strongest correlation. The ISM Services Index also missed its estimate at 51.6. This was below the analyst estimate of 53.5 and below January?s 54.0 reading.? This was not very surprising, as cold weather and snow had a negative impact on the service industry.?
The Fed Beige Book also noted the detrimental impact the weather had on the overall economy. In the Beige book, Fed Chairwoman Janet Yellen indicated that the Fed intends to continue reducing asset purchases but will keep interest rates near zero.? She had stated that it could be ?months? before the Fed could quantify the impact of the reduced asset purchases.? In the report, Yellen also indicated that the employment rate could be seen as a misleading number, with many jobless people simply not looking for jobs or working part-time. With the ADP and Beige Book out of the way, all eyes will be on the Friday?s non-farm payroll data. The only notable earnings reports over the next two sessions are both in the retail space, with Staples reporting today and Big Lots reporting tomorrow.
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Technical Notes? -? View Today’s Chart
Turning to the chart, we see prices establishing support near the previous resistance mark of 1841.25.? Failure to hold 1841.25 could result in prices testing 1800.? Given the fact that the market is in uncharted territory, prices may come up to test the next round number at 1900.? The RSI indicator is showing overbought levels, which could curb some of the market?s momentum.? The combination of being in uncharted territory and overbought conditions may test the resolve of the bull camp in the near-term.
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