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The Dow Jones finished up 0.38% or 56 points at 14,988.55, while the S&P 500 and NASDAQ also finished moderately higher, in a short, choppy trading session that saw the Dow whipsaw from as low as 14, 858 to as high as 15,025.
15,000 has proven to be something of a battleground, with bears so far managing to defend the high ground and repelling any attempt to advance well beyond this point.
Economic data today provided no clear message about the health of the US economy, with employment data in the plus column, but a ballooning trade deficit and a disappointingly low ISM non-manufacturing reading balancing things up in the minus column.
The ADP employment report estimated 188,000 payrolls were added to private employment during June, exceeding the consensus of expectations and showing an impressive improvement from May’s 134,000. Initial jobless claims came in at 343,000, showing a small improvement from the 348,000 recorded for the week prior.
Despite both of these reports, I don’t think this really changes the landscape ahead of Friday’s official employment figures. The ADP report has not proved to be a great indicator of non-farm payrolls so far this year and 188,000, while a nice bounce from May, is far from an exceptional number.
A Thomson-Reuters survey forecasts the unemployment rate to improve from 7.6% to 7.5% in June, but I wouldn’t be too surprised to see the rate remain unchanged. Even at 7.5% I think the Fed will be unconvinced that improvements in the labour market are sufficient to justify tapering in the near future.