The Day Ahead: Greek Austerity Plan, ISM Manufacturing, ADP Jobs, Fed Speak
It’s a busy day ahead as investors will eye key data on the manufacturing industry and receive one of the top forecasting tools for the monthly employment release.
Until the data hits the market, focus is on Europe as the Greek government recently new austerity measures so it can meet its deficit-cutting pledge. News reports say the plan will raise taxes and slash spending.
In the US, about 90 minutes before the bell sounds, Dow futures are off 7 points to 10,392 while S&P 500 futures are about flat at 1,171.10.
Meantime, commodities are on the rise. WTI crude oil is up 39 cents to $80.07 per barrel and Spot Gold is up $3.95 per ounce to $1,138.65.
Key Events Today:
8:30 ― The ADP Employment Survey saw the economy shed 22K private jobs in January ― the twenty-fourth consecutive month of losses but the slowest pace of cutbacks since December 2007. Economists are anticipating another 10k jobs lost in February, which, if true, could point to an overall increase in Friday’s government survey because it includes gains in the public sector.
“Our forecast for nonfarm payroll employment implies a decline in ADP private employment of about 70,000,” said economists from Nomura, predicting a decline well below the consensus. “A slightly lower figure would have no implications for our payrolls forecast.”
9:00 ― Richard Fisher, president of the Dallas Fed, speaks on globalization and the recovery to the Council on Foreign Relations in New York.
10:00 ―The ISM Non-Manufacturing Index hasn’t posted results in the same growth realm as its manufacturing cousin, but at least it recorded growth last month. In February the index, which tracks the services, financial, and construction sectors, is expected to climb half a point to 51.0.
“While freight activity picked up in recent weeks, this was offset by a deterioration in financial market conditions, including lower equity prices and increased volatility in both equity and bond markets, while employment indicators have not signaled much improvement,” said economists from IHS Global Insight.
1:00 ― Dennis Lockhart, president of the Atlanta Fed, speaks on credit markets and the economic outlook to the New York Association for Business Economics.
2:00 ― The Fed’s Beige Book, an anecdotal summary of economic conditions published two weeks before the FOMC meetings, reported on January 10 that ten of the 12 federal reserve districts were improving while two districts were mixed. Further improvement should be anticipated in this synopsis but with unemployment near double-digits it seems unlikely that a robust rebound will the in the cards.
“The report is likely to point to strong growth in US manufacturing and to note that final demand is partly coming from strong foreign growth,” said economists from Nomura. “In contrast, we expect respondents to report limited growth in housing and the labor market. We will be scrutinizing the section on inflation and wages to gauge whether price trends are weakening further or holding steady at subdued levels.”