Stock Market Update

The S&P 500 futures are down six points and are trading 0.1% below fair value, the Nasdaq 100 futures are down 38 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are up ten points and are trading 0.1% above fair value.

The ADP Employment Change Report for June showed 150,000 positions added to private-sector payrolls (Briefing.com consensus 163,000), led by a 63,000 in leisure/hospitality, Gains were registered by small businesses (5,000), medium establishments (88,000), and large companies (58,000).

The key takeaway from the report is the recognition that both growth in private-sector payrolls and pay has slowed. Year-over-year pay gains for job stayers was 4.9%, the slowest since August 2021. Year-over-year pay gains for job changers slowed to 7.7%.

The trade deficit widened to $75.1 billion in May (Briefing.com consensus -$76.0 billion) from an upwardly revised $74.5 billion (from -$74.6 billion) in April. That was result of export being $1.8 billion less than April exports and imports being $1.2 billion less than April imports.

The key takeaway from the report is that there were declines in both exports and imports, signaling that trade demand overall was softer in May.

Initial jobless claims for the week ending June 29 increased 4,000 to 238,000 (Briefing.com consensus 235,000). Continuing jobless claims increased 26,000 to 1.858 million, hitting their highest level since November 27, 2021.

The key takeaway from the report is that initial jobless claims have kicked up a notch but continue to track comfortably below recession levels; however, it is apparent in continuing jobless claims that finding a new job after being laid off isn't as easy as it used to be, which is consistent with some slowing in the labor market.