Stock Market Update

The S&P 500 futures are up 73 points and are trading 1.3% above fair value, the Nasdaq 100 futures are up 427 points and are trading 2.2% above fair value, and the Dow Jones Industrial Average futures are up 118 points and are trading 0.3% above fair value.

The July ADP Employment Change Report showed 122,000 jobs were added to private-sector payrolls (Briefing.com consensus 160,000) following an upwardly revised 155,000 (from 150,000) in June. The 4.8% year-over-year gain for job-stayers was the slowest pace of growth in three years.

The key takeaway from the report is that it connotes a slowdown in private-sector hiring and pay, which is the right mix for furthering the market's belief that the Fed will cut rates in September

The second quarter Employment Cost Index showed compensation costs for civilian workers increased 0.9% (Briefing.com consensus 1.0%), seasonally adjusted, for the three-month period ending in June 2024 versus1.2% for the three-month period ending in March 2024.

The key takeaway is that there was a year-over-year moderation in wages and salaries and benefit costs that, again, trended in the right manner to suggest the Fed might be convinced to cut rates in September.