Stock Market Update

The S&P 500 futures are up less than one point and are trading in line with fair value, the Nasdaq 100 futures are down two points and are trading fractionally below fair value, and the Dow Jones Industrial Average futures are up 20 points and are trading 0.1% above fair value.

ADP reported private sector employment increased by 122,000 jobs in December (Briefing.com consensus 131,000) with the goods-producing sector adding 10,000 jobs and the service-providing sector adding 112,000 jobs. The West region (+82,000) saw the biggest gain in jobs while large establishments (+97,000) accounted for the most new jobs. It was noted that the 4.6% year-over-year pay growth for job stayers was the slowest pace since July 2021.

Initial jobless claims -- a leading indicator -- decreased by 10,000 to 201,000 (Briefing.com consensus 218,000) for the week ending January 4, which is the lowest print since January 2024. Continuing jobless claims for the week ending December 27 increased by 33,000 to 1.867 million.

The key takeaway from the report is that layoff activity is low, but for employees that lose their job it has become more challenging to find a new one.

Treasury yields pulled back slightly in response. The 10-yr yield hit 4.72% earlier and sits at 4.70% now. The 2-yr yield moved to 4.27% from 4.31% after the data.