The Day Ahead: Markets Uncertain Obama's Jobs Plan Can Be Passed

President Obama's jobs speech failed to have an immediate upside in the stock markets, but it's too early to say whether the response signals disappointment in his plan or a lack of confidence that Republicans will support it.

The 10-year Treasury yield softened two basis points overnight to 2% and the 30-year yield softened three basis points to 3.34%. The tw0-year yield held steady at 0.20%.

That modest selling pressure hasn't translated into equity gains though. S&P 500 futures are down 15 points at 2,197 and Dow futures are 24 points lower at 11,199. 

In the first three days of this holiday-shortened week, the S&P has gained 11.9 points, or 1.02%, and the Dow has gained 55.6 points, or 0.49%.

Friday's futures appear to be following the European session, where stocks are roughly 1% down across the board. London's FTSE 100 is off  0.71% and France's CAC-40 is losing 1.36%.

Economists at BMO Capital Markets said Obama's $447 billion jobs plan "could lead to some upside in our 2012 U.S. growth forecast," but they called it "no small hurdle" to push the plan through a politically-divided Washington. 

"The President's proposals, if passed, would add significantly to growth," BMO wrote. "Key word: if. Perhaps the market reaction is a sign of investors' doubts that he could get this past Congress."

Meantime, light crude oil is 1.33% lower at $87.87 per barrel, while gold prices are 1.10% lower at $1,836.90.

Key Events Today

10:00 - Wholesale Trade is anticipated to pick up 0.8% in July following a 0.6% gain in June and a 1.7% increase in May. One reason is firming energy prices lending upward pressure, according to Nomura Global Economics.

"Wholesale inventories have surpassed historical highs and are expected to continue expanding in July," added BBVA. "Durable goods inventories are on the rise, mostly due to transportation equipment, while growth of nondurable goods inventories appears to be decelerating. Consumer confidence has declined during the summer months, and with no clear signs of recovering demand, it is unlikely that a rebound in sales will reduce high inventories. Thus, we expect wholesale inventories to continue growing in July."