Dow futures were down 15 points in Thursday’s pre-opening trading after a third straight day of lethargic trading. Remember that Trump speech rally last week of more than 300 points? Only 40 points of it is left.
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Nothing positive has followed President Trump’s performance. The market should not need continuous positive reinforcement from the White House it never did before but this is a new era in which big promises were made and expectationsare high for delivery.
The Bureau of Labor Statistics will release its jobs report tomorrow, and I have no idea how the bond market will react. The consensus guess by economists remains for a gain of 185,000 in nonfarm payrolls, but traders are braced for a much larger gainafter yesterday’s ADP employment report. With a high payroll number expected, the only risk for more bond market pain will come from the wage component. Hourly wages are expectedto show a gain of 0.3%. A higher number would be a negative for bonds, whereas a lower number would give bond prices a lift.
Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.