US markets stumbled at the last hurdle of the quarter, with the S&P 500, narrowly making quarterly gains while the Dow Jones closed the quarter 0.3% lower. Investors are worried another strong jobs gain on Friday while markets are closed will bring in the timing of the first rate-hike.
Q1 earnings from some multinationals and energy companies are expected to be hard hit by a jump in the value of the dollar and lower oil prices. This is expected to slow income growth that helped propel the S&P 500 to new highs throughout 2014. A slowdown in earnings growth doesn’t spell the end of the bull-market for US stocks but may mean we’ve hit a peak for the next month or so.
With markets closed for the release of non-farm payrolls on Good Friday, extra emphasis may be put on today’s ADP unemployment report. Expectations are for a modest rise in the number of private sector jobs to 225K, though there is a chance of a lower figure because of the cold-weather in the North East.
The ISM Manufacturing PMI for March is expected to slow slightly to 52.5 from 52.9 in February adding to evidence that Q1 is a slowdown from Q4. Today’s ISM as well as the trade balance on Thursday could spur another round of Q1 growth downgrades.
Non-existent inflation and slowing growth has already seen the Federal Reserve bend a little on its outlook for how far rates will rise in the next year and a half. If US data continues to disappoint there will have to be a point at which the Fed decides to put off a rate hike all together. An about face turn by the Fed would be a game-changer for the outlook of the US dollar and global stocks.
23 million GoDaddy shares have been priced at $20 for the IPO today, above the stated 22 million on offer at a price range of $17-$19.
Monsanto Company (NYSE:MON) reports earnings on Wednesday.
Futures suggest the:
S&P 500 will open 4 points lower at 2,063 with the
Dow Jones expected to open 12 points lower at 17,764 and the
Nasdaq 100 3 points lower at 4,330.
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