Positive signals lift the markets
Yesterday we had positive signals and data that helped the market sentiment and lifted the S&P 500 to its highest levels since September 30.
Starting from ongoing energy concerns, that we had two signals which calmed the markets. First of all, after API reports, EIA reports also confirmed that US crude oil inventories in the week ended October 1, increased. On the other hand, after that Russian officials repeated that GAS supply to Europe could increase, market condition and sentiment changed and reduced the price of energy carriers.
And now, with yesterday's ADP data, the focus turns to US employment data. Yesterday, the US ADP employment reported 568,000 new jobs in September, which was better than the market's estimates to create 428,000 and more than 340K in August. These data in more detail showing us that best performance was at professional/commercial service industry with 61K new jobs, then trade/transportation/utilities recorded an increase of 54K jobs and the manufacturing industry with 49K created jobs is in the third place.
Today, the Challenger Job Cuts in the United States in September and the last week's jobless claims will publish. The former Challenger Job Cuts number was 15,723K in August, much less than pre-pandemic levels. At the same time, jobless claims had increased in the past three weeks. Data showing that the labor market has undergone significant changes, and the labor shortage is one of the results and not the problem itself. Anyway, we have concerns there and should be taken seriously.
Another part of the job market that needs to be considered, is the United States JOLTs Job Openings. US Bureau of Labor statistics measures job vacancies. JOLTS defines Job Openings as all positions that are still not filled on the last business day of every month. And it is for the fifth consecutive month increasing and printing always a new record. According to the published data by the US Bureau of Labor, the outbreak of the pandemic has changed some Americans’ minds about work patterns. The flexibility of remote work is one of the most important reasons that holding back many workers to get back to their offices.
Overall, development in the labor market is fine and increasing the expectations that the Fed will announce a reduction in bond purchases in advance next month, especially if Friday's NFP numbers show more than 500K new jobs in September. Therefore, this Friday's NFP numbers will get a high degree of attention.
