Is Today's ADP Employment Report A Positive Precursor to Friday's Jobs Numbers?

The market is slightly higher in early trading after a couple of better than expected economic reports, and some more strong earnings.

Last night, Priceline (PCLN) reported very strong earnings and guidance, and the stock has surged +20% higher in early trading, up $50. Why did we sell that one again?!? Oh yeah, something about a slowdown in Europe hurting their business. Ugh.

In economic news, the ADP Employment report came in better than expected showing 42,000 jobs were added to the private sector in July. This report doesn't always correlate well with the govt. payrolls report (due out Friday), so we'll have to see if Friday's numbers top the consensus as well. Right now, estimates for Friday's payroll report is for a loss of 100,000 jobs.

Also, the ISM Services Index for July came in above expectations at 54.3, up from last month's reading of 53.8.

Asian markets were mixed overnight, and Europe is lower this morning. The euro is finally lower today, boosting the dollar. Commodities are mixed; oil prices are down a bit to $82.20 after a big rally yesterday, and gold prices are higher, back near the $1200 level.

The 10-year yield is again trying to bounce from those low 2.90% levels, currently higher to 2.95%; and the volatility index is just slightly higher at 22.73.

Trading comment: Yesterday I mentioned that I wanted to see the S&P 500 hold the 200-day average above 1114, and that is exactly what happened. We'll see how today goes, but if we can hold around these levels, I think it puts the market in good shape for another move higher, and above the June highs (SPX 1131).

Friday's employment report is always a wildcard, and can cause some volatility in the market. But overall the action is constructive, and favors the bulls at this juncture.