MARKET SNAP: At 6:15 a.m. ET, S&P 500 futures up 0.16%. 10-Year Treasury yield flat at 2.71%. Nymex down 0.13% at $101.33. Gold down 0.35% at $1335.6/oz. In Europe, FTSE 100 up 0.16%, DAX up 0.24% and CAC 40 up 0.58%. In Asia, Nikkei 225 up 1.59% and Hang Seng up 0.55%.
WATCH FOR: Weekly Jobless Claims (8:30 a.m. Eastern Time): seen 335K; previously 348K. Fourth-Quarter Productivity (8:30): seen +1.9%; previously +3.2%. Fourth-Quarter Unit Labor Costs (8:30): seen -0.3%; previously -1.6%. January Factory Orders (10:00): seen -0.3%; previously -1.5%. Analogic, Big Lots, Children’s Place, Ciena, Costco, Finisar, Fresh market, H&R Block, Joy Global, Korn/Ferry, Kroger, Quiksilver, Rite-Aid (monthly) and Staples are among companies scheduled to report quarterly results.
THE BREAKFAST BRIEFING
You might as well toss out Friday’s jobs report before it’s even released, as weather-related excuses are already flying left and right.
Economists for weeks have blamed unusually cold weather and snowstorms for disappointing manufacturing, retail sales and housing data. Anecdotal evidence from the Federal Reserve on Wednesday offered more proof that the severe winter conditions across the nation actually did hamper economic growth at the beginning of the year.
The Fed’s “beige book,” which assesses the economy in the central bank’s 12 districts across the nation, went to great lengths to highlight how much the weather disrupted the economy. For instance, the word “weather” was mentioned 119 times in the Fed’s 48-page document. That compares to 21 mentions in the January report, 18 references a year ago and a mere three mentions in January 2013.
That means investors and economists will likely blame any distortions in Friday’s employment report on the winter conditions, which may make the market more likely to give a weak report a pass. Economists polled by The Wall Street Journal estimate the economy added 152,000 jobs last month, with the unemployment rate falling to 6.5%.
“We continue to wait for ‘clean’ data before we can more clearly decipher the underlying trend of the economy versus temporary weather effects,” Lindsey Piegza, chief economist at Sterne Agee, wrote to clients Wednesday after the Fed’s beige book was released.
Eric Green, global head of rates, FX and commodity research at TD Securities, said the beige book reinforced the Fed’s mindset that any slowdown in economic activity will be short-lived. It also shouldn’t impact the central bank’s plan to keep dialing back its accommodative policies at a measured pace throughout the year.
“The risks going into the Friday number feel asymmetric,” he said. “A weak number may be more readily faded on weather related issues, but a strong number despite the weather may be viewed as a sign of an impending bounce in the growth profile.”
After the S&P 500 surged to a new record on Tuesday, the stock index limped to a virtually flat finish Wednesday as investors disregarded weak service-sector data and an ADP jobs report that fell short of expectations.
Weekly jobless claims and January factory orders are on tap later today before the almighty Jobs Friday.
No matter how the jobs report shakes out, don’t expect it to get in the way of the market’s march higher.
Morning MoneyBeat Daily Factoid: On this day in 1912, Nabisco first introduced the Oreo cookie.
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