Friday, March 17, 2023
Homemarket insiderMarkets could drift as traders await jobs report

Markets could drift as traders await jobs report

Markets are in wait-and-see mode ahead of Friday's jobs report, but there are a few events Thursday that could sway the market's direction.

One is the European Central Bank's policy meeting Thursday morning; traders expect markets to be volatile around it. A fresh batch of earnings reports is also due, including General Motors, while continued spillover from Wednesday's reports will also be a factor after concerns about Twitter's growth slammed its stock and weighed on its social media rivals. Disney, however, had positive results which saw the Dow component's stock up over 3.5 percent after the bell.

There will also be continued fallout from Coca-Cola's surprise acquisition of a 10 percent stake in Green Mountain Coffee Roasters and 10-year agreement to develop a Keurig Cold at home beverage system. That triggered a 43 percent jump in Green Mountain, squeezing some high-profile shorts and is likely to result in more collateral damage. At the same time, shares of Soda Stream plunged on concerns the Coke venture will threaten sales of its at–home soda system.

Jin Lee | Bloomberg | Getty Images

Traders are also watching for continued action in hot sectors – biotech and 3-D printing in particular. 3-D printer stocks slumped on Wednesday after 3D Systems cut its 2014 outlook. The biotech iShares Nasdaq Biotech ETF IBB fell 1.7 percent, and two newly listed biotech companies, Genocea Bioscenieces and UniQure both fell in their market debuts.

There is also some important data, including weekly jobless claims, international trade, and productivity and costs, all at 8:30 a.m. ET. Chain stores also report monthly sales.

Jobless claims are key because they have risen slightly, which is a concern for economists. They are expected to come in at 338,000 after rising to 348,000 last week.

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Markets are hinging on Friday's jobs report because traders see it as being very closely tied to the Federal Reserve's future action on its quantitative easing program. There has been anxiety that the Fed is moving ahead to slow easing, just as some disappointing data, like Monday's ISM manufacturing survey, is signaling a slowing economy. Economists are watching each report to see how much impact harsher-than-normal winter weather is having on the economy, a temporary trend that should reverse in spring.

So far, the Fed has pared back its QE program by $20 billion and expectations are that it will continue to wind down the $65 billion in monthly purchases until they are ended later this year.


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