On Friday, the Bureau of Labor Statistics will post non-farm payrolls for September. On Wednesday, the ADP posted private payrolls increased more than expected.
The ADP posted jobs rising by 143,000 in September, while annual pay grew by 4.7% Y/Y.
Traders may bet on a strong job report. That would hurt stock markets and bond prices. Yields in the 10-year Treasury Bill (IEF) and 30-year Treasury (TLT) would rise, creating a better buying price for debt investors. The S&P 500 (SPY) and small-cap index (IWM) may fall slightly.
Retail stocks would underperform. The strong job market would dissuade the Federal Reserve from cutting rates, if at all. Today, watch Levi Strauss (LEVI), a denim maker. The firm reported an earnings per share of $0.33. Revenue grew by 0.7% Y/Y to $1.52 billion. To maximize returns, the company is considering the sale of Dockers. The brand posted revenue falling by 15% Y/Y.
Levi’s posted strong sales growth in Europe, up by 6% Y/Y. DTC sales grew by 10%. For the year, the company expects sales to grow by 1%, compared to a previous guidance of 1% to 3%.
In the commodities market, watch crude oil markets. Crude prices jumped by more than 4% in the previous session. Markets are pricing in the risk of supply disruptions in Iran. In addition, the port strike could disrupt oil deliveries.
