Wall Street Takes a Breather in Thursday’s Premarket

Morning Outlook

Not surprisingly, Wall Street is heading lower in premarket action Thursday. Following two consecutive days of extremely strong gains, equities look to take a breather and a healthy consolidation ahead of some key economic figures. All eyes turn to the economy, with ADP and weekly jobless claims leading up to tomorrow’s jobs number. Futures on the Dow Jones Industrial Average fell 21 points, or 0.2%, to 13,311, while S&P 500 Index futures lost 3.5 points to 1,453.60. Nasdaq 100 futures shed 2 points, or 0.1%, to 2,736.75.

What a start to 2013! Wall Street advanced for the second straight day on Wednesday, soaring following the passage of a bipartisan deal in the House. The Dow Jones Industrial Average saw its biggest yearly open of all time, rising 308.41 points, or 2.4%, at 13,412.55 with all 30 blue chips climbing. The S&P 500 index climbed 36.23 points, or 2.5%, to 1,462.42, with telecommunications the best performing of its 10 major industry sectors, all of which advanced. The Nasdaq Composite added 92.75 points, or 3.1%, to 3,112.26.

Economic Calendar

8:15 AM
ADP Employment Report: The new ADP national employment report can help improve the payroll forecast by providing information in advance of the employment report. By tracking the jobs data, investors can sense the degree of tightness in the labor market. The report is a good gauge of private sector employment heading into Friday’s report by the Labor Department. The current state of the economy starts and ends with job creation. Consumer spending, housing, wages, and so on are all functions of people having gainful employment. The consensus estimate is for 150,000 private sector jobs in the month of December, up from the 118,000 created in November. The range goes from 122,000 to 200,000.

8:30 AM
Jobless Claims: New unemployment claims for the week of December 29th, to show the number of individuals who filed for unemployment insurance for the first time. The fewer people filing for unemployment benefits, the more have jobs, the more income in the consumer’s pocket, as well as a forecast on the strength of the economy. The consensus is for an increase to 363,000 for first time jobless claims after posting 350K the week prior. The consensus range goes from 335K to 380K. They always overestimate the number prior to the holiday week and underestimate the result the following week.

2:00 PM
FOMC Minutes: Gives a more in depth look at the thinking of the Fed at the last Federal Open Market Committee meeting in September, where the fed left its target rates unchanged and initiated the latest round of bond buying. Market sentiment is still high on additional liquidity and sustained low rates as needed to aid the recovery. Bernanke can move markets like no other, and the last thing markets want is to feel under pressure from monetary policy following the disfunction of fiscal policy makers.






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