Over the past seventeen years, June’s employment situation report, usually released on the first Friday of July, has largely been a market disappointment.
DJIA(NYSEARCA:DIA), S&P 500(NYSEARCA:SOY), NASDAQ(NYSEARCA:QQQ), Russell 1000(NYSEARCA:IWM) and Russell 2000 have all declined a majority of the time. With the exception of NASDAQ, average, historical performance on the day has been slightly negative. Across the board strength in four of the last five years has greatly improved average performance as the prior twelve year stretch was heavily bearish.
Today’s ADP private sector employment report showed 177k jobs were added in June. This was slightly softer than the 190k forecast, but the report also came with an upward revision to May’s numbers. This suggests that tomorrow’s employment situation report could be solid as well. Current estimates are looking for around 190k net new jobs were added in June and the unemployment rate is anticipated to hover around 3.8%.
The U.S. labor market trend has been positive and likely continued in June. Which under “normal” circumstances would be positive for the market, but this time around it could also lend support for further rate hikes by the Fed which may not be beneficial. There is also the possibility of additional tariffs tomorrow that could outweigh any other data on the day.