Wednesday, April 2, 2025
Today’s the big day: when the Trump administration brings fresh tariffs to its trading partners around the globe. Double-digit tariffs, too — from +10% on Canadian energy products to +25% on all goods coming from Mexico. It looks to be the opening salvo in a global trade war, although some market participants insist on seeing the silver linings: it will both increase revenues to pay for the tax cut extension and create a new industrial boom in the U.S.
These tariffs are to be announced today right as the closing bell sounds: 4pm ET. President Trump has already labeled this “Liberation Day” — the U.S. being liberated from unfair trade deals, including those negotiated during Trump’s first term (enacted in July of 2020). Conditions are different today than they were back then, and these policies are more likely to provoke counter-tariff reactions from the U.S.’s trading partners.
Currently, the Dow is trading down -350 points, the S&P 500 is -55 points and the Nasdaq is -250. Bond yields remain muted at +4.15% on the 10-year and +3.87% on the 2-year. With how much value has already been taken from the equities market, any positive surprise on tariffs have the potential to spring market indexes back. On the other hand, if tariffs become an albatross, the fall will no longer be from all-time highs.
ADP Private-Sector Payrolls +155K: Higher than Expected
Private-sector payrolls for March from
Automatic Data Processing ADP are out this morning, and notably stronger at +155K new positions filled than the expected +120K. The previous month was revised upward by 7000 to +84K — still the second-lowest print of the past year.
The balance between Goods and Services-related jobs has gone back to more or less “normal” ratios: +24K on Goods and +132K on Services, while the estimate for Friday’s non-farm payroll report from the U.S. government is currently +140K. None of these are disappointing levels, aside from perhaps goods-producing positions filled, which is no big surprise for anyone paying attention to our economy over the past few years.
Small companies (below 50 employees) put up a strong showing at +52K hires last month, bested only by large firms (more than 500 employees) +59K in March. Medium-sized businesses made up the remaining +43K jobs filled. These are all decent showings; as long as roughly 100K jobs are filled per month, that basically makes up for retiring Baby Boomers (and some older Gen-Xers), and anything above this level connotes job growth.
By industry, Professional & Business Services companies brought in +57K new hires, followed by Financial Activities at +38K, Manufacturing at +21K, Leisure & Hospitality at +17K and Education & Healthcare +12K. What we’ve seen over a longer period is these Pro/Biz Services numbers month over month can be spotty: sometimes leading all industries, like today, but sometimes falling out of the top five industries.
Finally, unique to ADP’s monthly jobs report is the balance between Job Stayers and Job Changers: Stayers averaged earning +4.6% more for the month, while Job Changers came in at +6.5%. This is about as narrow as we’ve seen these two comparisons. In other jobs reports, such as yesterday’s JOLTS, we’re seeing fewer people moving on from current positions, and companies less eager to lay off their workforces.
This does not go for the U.S. government currently, however: we’ve seen through DOGE and now Health & Human Services (HHS), among others, getting rid of tens of thousands of jobs. But, of course, these are not tracked in the private-sector payrolls from ADP.
What to Expect from Today’s Stock Market
After the market opens this morning, we’ll see a new report on
Factory Orders for February. It will essentially be a backward-looking historical document; even any pull-forward to beat the new tariff landscape would more likely show up in March Factory Orders, which will be out a month from now. And
RH RH reports its quarterly earnings after today’s close.
But the tariff war will take center stage today, and rightly so. We expect plenty of market participants to keep an ear to the ground and listen for reverberations that may help anticipate whether trading partners will cry “uncle” at the last minute or dig their heels in for a long-term economic standoff.
Questions or comments about this article and/or author? Click here>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report RH (RH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
