Stock Market Update

The stock market remains on track for a firmly higher open this morning, with technology shares advancing in premarket trading following the release of the Employment Situation report.

The September employment report skewed more toward a "bad news is good news" kind of read. We say that recognizing that nonfarm payrolls increased by just 29,000, while revisions to July and August combined led to 60,000 fewer jobs than previously reported. The unemployment rate ticked up from 4.1% to 4.2% (still low) and average hourly earnings rose only 0.1% month-over-month, leaving them up 3.0% year-over-year versus 3.1% in July.

The key takeaway from the report is that it isn't going to exacerbate inflation concerns for the Fed. It won't eradicate those concerns, but in terms of the market's newfound belief that the Fed is unlikely to raise rates at its October FOMC meeting, this report slides neatly into that thinking.