Stocks Rally Ahead of Important Employment Report

Plus Active Trade Updates

U.S. Stocks opened higher this morning yet the economic data ahead of Friday’s increasingly important Non-Farm Payrolls number remains murky.  Jobless claims were mixed with the number of new claims rising a bit more than expected while the number of existing claims remained near recent ranges.

On the other hand, the number of layoffs, as reported by Challenger Grey, Christmas rose to levels not seen since January 2023.  Moreover, announcements for future layoffs (WARN notices) continue to creep up.

Your opinion, as expressed in my recent poll favors a number of greater than 200,000 new jobs created.

All of which sets up tomorrow’s Non-Farm Payrolls as a crucial number ahead of next week’s CPI and PPI numbers.  The Federal Reserve continues to predict rate cuts by the end of 2024.  But the number of cuts, and when they will occur is now in question.

The U.S. Ten Year Note yield (TNX) rolled over this morning after its recent attempt to climb above the important 4.4% yield.  If the payroll data is seen favorable by the bond market, we may see a test of the lower yield range. Keep an eye on the 4.1% area.

The S&P 500 (SPX) is once again testing the 5250 resistance area as traders await the Non-Farm payrolls number. If stocks like what they see in the payroll data, we may see a new high on SPX. Short term support is at the 20-day moving average. More meaningful support is at 5150 and the 50-day moving average