More Mixed Economic Data
Markets started out lower again this morning but are already trying to reverse early gains and move into positive territory.
Economic data this morning was mixed. The ADP Employment report showed the private sector added 179,000 jobs, which was below estimates of more than 200k. So that was a bit weak and weighed on sentiment, but we still need to see if it correlates to Friday's govt jobs report.
The ISM Services Index on the other hand surprised to the upside, rising to 56.3 in May from 55.2 the prior month. This was the strongest reading in two years. And while we know that Q1 GDP was much weaker than expected, Q2 is estimated to bounce back fairly strong. So the 2-quarter average should be roughly in-line with the low 2% growth rates many had expected.
It is likely that stocks will continue to trade in a narrow range today ahead of the ECB announcement tomorrow and the jobs report on Friday.
Asian markets were mixed overnight, and Europe is lower this morning. Eurozone GDP rose 0.9% year/year, while the services PMI fell is several peripheral European countries.
Oil prices are higher today near $130.35 while gold prices remain weak around $1243.
The 10-year yield is rising a bit further and has now climbed back to 2.61%.
The volatility index remains near low overall levels at 12.0.
Trading comment: The market continues to hold near its recent highs and shake off any early morning weakness. Volumes have been low but we should see a pickup the next 2 days as the big news announcement traders are waiting on hit the wires. For now, we continue to look for upcoming weakness to add to stock exposure favoring large-cap names over small.