The ADP employment change report came out this morning, and, as it was the month before, it fell well short of expectations. Whereas the predicted increase in jobs was 111,000, the actual number was one-third that level. As you can see, the ADP figure has been generally shrinking for the past eight months, so there’s definitely a weakening trend in the wonderful world of job creation.
As such, bonds are spiking higher, as the market assumes a dying jobs market gives Powell license to drop interest rates in an attempt to poke a stick at a dying economy. The way AI is destroying jobs, interest rates could be negative ten percent, and it’s not going to matter.
Just before the opening bell, equity futures are doing jack squat. The /ES, /NQ, and /RTY are all changed by literally a hundredth of a percent, and over the past 20 hours, the /NQ has hammered out the fabled Man Recovering From Jet Lag in Silent Repose pattern.
Crude oil, on the other hand, isn’t quite sure what to do with itself, whipping inside a one-dollar range rather violently.
Amidst all this murk and muck, just about the only pattern presenting itself with reasonable clarity remains the long-term /RTY futures, whose Fibonaccis are doing a yeoman’s job of providing support and resistance. I have offered the arrows below to suggest an analogy between what happened in late 2021/early 2022 and what’s going on right now.
I remain lightly positioned and even more suspicious than usual of this market. The main event this week is going to be the monthly jobs report in 48 hours. Until then, good luck, and try not to fall asleep at your keyboard.
