EmailThanks to a late rally effort, the equity market bounced back from larger losses and actually posted a small gain on Tuesday. There wasn't any specific news catalyst for the closing charge and it wasn't exactly a spirited effort. That much was evident in the fact that volume at the NYSE was just under 600 mln shares.
At the moment, the S&P 500 appears poised to see some carryover buying interest. Again, though, there isn't a lot of spirited activity in the market. To wit, the S&P futures are just 0.1% above fair value.
A better-than-expected ADP Employment Change report for September has been an underpinning influence that has offset a round of relatively weak non-manufacturing PMI readings out of China and the eurozone and a larger-than-expected trade deficit for Australia.
The weak dataset out of China and the eurozone is not all that surprising as softness (if not outright weakness) in the data has become the norm rather than the exception. That hasn't made a lot of difference to the U.S. equity market, however, which has held on to central bank support as its security blanket and sits near multi-year highs.
In terms of the ADP report, it showed a 162,000 increase in private sector employment for September. That was less than a downwardly revised 189,000 increase (from 201,000) in August, but above the Briefing.com consensus estimate of 133,000.
The increase was led by small businesses, which reportedly added 81,000 positions. Medium-sized and large businesses added 64,000 and 17,000 jobs, respectively.
The services sector is where the vast majority of jobs were created (144,000) while the goods-producing sector saw only a modest uptick (18,000).
Separately, the Mortgage Bankers Association reported a 16.6% increase in mortgage applications for the week of September 29, led by a 19.6% surge in refinancing applications (purchase applications rose 3.9%). The index for refinancing is at its highest level since April 2009. Now, the only question is: will the banks extend the credit?
The futures market perked up a bit in the wake of the ADP report, but enthusiasm has been held in check with participants cognizant that the headline strength in the ADP report for August was not followed up with a similarly strong increase in the nonfarm payrolls report.
Also, a bit of a wait-and-see mentality persists ahead of the ISM Services report at 10:00 a.m. ET (Briefing.com consensus 53.0; prior 53.7), tonight's presidential debate, and policy meetings held tomorrow by the Bank of England and the European Central Bank.
--Patrick J. O'Hare, Briefing.com
