Markets Await Jobs Data

We start a full week of trading this morning slightly in the red, based once again on — you guessed it — trade tensions. On Friday, President Trump accused China of violating its tariff agreement with the U.S., and late in the trading day Trump announced he would be doubling steel tariffs from 25% to 50%. This came as the president was celebrating the takeover of U.S. Steel (X) by Japan’s largest steel producer, Nippon Steel.

This has proven to be a boon for American steel manufacturer Cleveland-Cliffs (CLF), which is surging +24% this morning. Otherwise, currently both the blue-chip Dow and the tech-heavy Nasdaq are down -100 points, with the S&P 500 down -20 and the small-cap Russell 2000 is -4. All four indexes are in the green by single digits over the past month, but off the May 20th highs.

Jobs Week to Take Center Stage

This is also Jobs Week, as it begins a new month. Tuesday brings us the latest Job Openings and Labor Turnover Survey (JOLTS) for the month in arrears, and then Wednesday has private-sector payrolls from Automatic Data Processing ADP ahead of the opening bell for May. Thursday will provide Weekly Jobless Claims — which we’ve begun to see creep a little higher in the past few weeks — and Friday brings us the big U.S. Employment Report from the Bureau of Labor Statistics (BLS).

Expectations on these monthly prints are for job gains to reach low 6-figures for last month: +112K for ADP and +125K on BLS. Should we see notable weakness from these levels, we may begin to hear narratives related to the overall labor market loosening a bit. That’s because we’re seeing younger Baby Boomers and older GenXers beginning to call it a career — to the tune of nearly 100K per month.

We also know major corporations have set about a new tranche of employee layoffs, and we understand how the DOGE program spearheaded by Tesla (TSLA) CEO Elon Musk has sent pink slips to thousands of federal employees since February of this year. Musk himself is now leaving the White House to attend his various enterprises, but the effects of his DOGE program will continue to resound over the coming months.

That said, the U.S. labor force has clearly been underestimated, going back several years. Job growth, while no longer as robust as it was in the Great Reopening following the Covid pandemic, has mystified economists in its ability to retain a healthy workforce. For instance, even with a slight uptick in the Unemployment Rate in recent months, it is now expected to remain at a still-historically-low 4.2%.

Campbell’s Reports Q3 Earnings Beat

Calendar earnings season is basically over — with the exception of a few companies that routinely fit outside the cluster of quarterly reportage, like Dollar General (DG), CrowdStrike (CRWD) and Broadcom (AVGO) — but Campbell’s Co. (CPB) outpaced expectations in its fiscal Q3 quarter released early this morning. The famous American soup company also owns Pepperidge Farm, V8, Snyder’s pretzels and other brands.

Earnings for the quarter reached 73 cents per share, a +12% beat over the 65 cents expected in the Zacks consensus (though 2 cents per share below the year-ago quarter). Revenues of $2.48 billion surpassed expectations by +1.55%, and has grown from $2.37 billion in the same quarter a year ago. Shares are up modestly in today’s pre-market, but are still -18% year to date.

What to Expect from the Stock Market Today

Once the opening bell sounds today, we’ll look for the final print on S&P Manufacturing PMI and ISM Manufacturing for May. S&P is expected to remain above the key 50-level between expansion and contraction at +52.3, while ISM is projected to slip 20 basis points to +48.5% from the earlier report, just below that 50 threshold.

Also, Construction Spending for April will be hitting the tape after the regular trading session begins. Expectations here are to swing to a positive +0.2% from the -0.5% reported for March. We’ve seen four months of the past year with negative construction spending, but two of those have occurred in the past three months. Recent highs came in October of last year, at +1.6%.

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This article originally published on Zacks Investment Research (zacks.com).

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