In this note we take a look at the US economic data and Wall Street 30 technical setups.
Another Jam-packed week with economic data in the U.S as the FED’s meeting minutes is also set for release later tonight, 1 July 2020 at around 20:00 SAST. FED chair Jerome Powell testified before the House Financial Services Committee yesterday the economy is showing signs of recovery. Powell emphasized the fact that the coronavirus pandemic will present new challenges and the path ahead for the economy remains “extraordinarily uncertain”.
Remember the initial Jobless claims will be released at the same time as the jobs report so expect an increase in market volatility on Thursday 14:30 SAST.
We have seen historic levels reached in unemployment but have also seen these numbers decline over the past weeks. Analyst consensus is that this week’s U.S Jobless claims should come in at around 1.3 million which is lower than the previous weeks 1.4 million jobless claims.
Chart - Weekly U.S jobless claims
The ISM Manufacturing PMI number is expected to close in on the 50 mark at 49.5 which is higher than the previous reading of 43.1 as lockdown measures are eased across the U.S. a close eye will be kept on seasonal factors within the Manufacturing sector. The data is expected to be released today the 1st of July 2020 at 16:00 SAST.
Chart - The ISM Manufacturing PMI
The ADP Non-farm Employment Change is also expected to surprise to the upside to 3 million for the month of June 2020. The data is expected to be released today the 1st of July 2020 at 14:15 SAST.
The U.S. ADP Non-farm Employment Change is an excellent predictor of the Non-Farm Payrolls report as the ADP Non-Farm Employment Change measures the monthly change in non-farm, private employment. The U.S. ADP Non-farm Employment Change is released two days ahead of the NFP jobs number.
Chart - The U.S. ADP Non-farm Employment Change
The number of new Non-Farm jobs for June is expected to inch higher and remain in positive territory, with the number expected to come in at 2.9 million from the previous month's surprise of 2.5 million Non-Farm jobs.
The Average hourly earnings (M/M) number is expected to go into negative to -0.7% from the previous months -1.0% and the Average hourly earnings (Y/Y) is expected to decrease to 6.7%
The U.S. Unemployment Rate measures the percentage of the total workforce that is unemployed and actively seeking employment during the previous month. The U.S. Unemployment Rate is expected to show a decrease from the previous reading to 12.3%.
The Non-Farm Payrolls report (NFP) is treated as an economic indicator for people employed during the previous month, and the number being released will have a direct impact on the markets. In the United States, consumer spending accounts for most of the economic activity, and the Non-Farm Payrolls report represents 80% of the U.S. workforce. Farmers are excluded from the employment figures due to the seasonality in farm jobs.
The Nasdaq and S&P 500 have been on a roll over the last quarter which has seen the Nasdaq push to new highs leaving the Dow in a pile of dust. The Wall Street 30 Index has been consolidating over the last couple of weeks which could signal a breakout in either direction.
Our Wall Street 30 Index outlook from last week mentioned some important levels to take note of while the Index remains subdued, for now. The 50-day SMA is acting as support and will be watched closely if it can remain intact to support higher prices.
Keep an eye on the FED minutes as fundamentals should support a move in either direction, but if we do see a break of support at 24545 (pink line) then sentiment should favour the bears. For a move higher the Dow needs to close above major resistance at our previous target price of 26721.
Technical points to look out for on the Daily Wall Street 30:
Chart - WallStreet30 Daily
Take note: The outlook and levels might change as this outlook is released during the current days (Wednesday the 1st of July 2020) U.S Market open.
Non-Farm Payrolls are usually reported on the first Friday of the month, whereby the number of additional jobs added from the previous month is released. The US Non-Farm Payroll number will be released locally one day earlier this month on Thursday the 2nd of July 2020 at 14:30 SAST.
Sources – Bloomberg, The Washington Post, Koyfin, Investing.com, MetaTrader5
Disclaimer:
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