Market Mood Before the Big US Jobs Report
Where We Are
Yesterday was the calm‑before‑the‑storm edition of the market.
The S&P 500 took a tiny dip of roughly 0.3 %—not exactly a parade.
Yet, the tech sector was still playing a mini‑rock‑n‑roll show, holding its ground better than a few days ago.
Sentiment & Stocks
- Three back‑to‑back daily declines in the benchmark index had bull‑club heads rubbing shoulders in doubt.
- Investors ganged up on de‑risking moves, trimming positions before the big Non‑Farm Payrolls (NFP) coming out later.
- Overall tone? Still a bit wonky, but people hoped for a more upbeat mix than this week’s data.
Data Highlights
- ISM Services PMI nudged up to 51.5, just a touch higher than analysts expected, but the price‑forward part reminded us that inflation isn’t fading yet.
- Last week’s jobless claims hit 227 k first‑time figures, with 30 k fewer continuing claims—solid numbers, but not tied to today’s wage survey.
Oil & Currency
- Crude wobbled as OPEC+ delayed a 180 k bpd production bump, holding the price steady for a while.
- The US dollar was a bit of a mellowed soul, slipping below the 101 mark despite a brief Treasury pullback.
- Meanwhile, the Japanese yen stole the show across the G10, with USD/JPY sliding under 143. The yen is ready to swoop in stronger if the NFP comes soft.
- Volatility spikes were the talk of the town—GBP, EUR, and JPY options were all at their highest in about a year.
What’s Next
It’s Friday—almost a holiday vibe—but don’t forget the August US employment report that’s about to hit the markets.
Key Forecasts
- Non‑farm payrolls expected to climb by +165 k (a rebound from July’s +114 k).
- Unemployment slated to dip by 0.1 percentage point to 4.2 %.
- Average hourly earnings predicted to rise 0.3 % month‑over‑month.
Why the Upside
- Hurricane Beryl rattled July numbers, creating a tsunami of temporary layoffs—an offset that might not carry into August.
- Weekly jobless claims still look solid, suggesting that the shower of weakness didn’t stick around.
- If the report surprises to the upside, traders are gearing for a 25 bp Fed cut this month; if it’s soft, a 50 bp cut is likely next month.
Other Market Movers
- EU’s final Q2 GDP figures will show a neat 0.3 % quarter‑on‑quarter growth.
- Canada’s August employment data follows a rate cut, likely breathing life back into jobs—looking for an increase of about 26.5 k while unemployment nudges higher.
In the end, the markets love a good story. Bad news? Think “nervous nerves.” Good news? They’re either cheering or sprinting for policy freedom. The friendly drama of the US labor scene is a reminder that even exact numbers can surprise investors. Enjoy the weekend—but keep an eye on the job report; it could turn the quiet Thursday into a wild Friday forecast!
