Market Shrugs Off Strong Jobs Data

The market is lower in early trading, despite what looks like a very solid ADP Employment report. The data showed private payrolls increased by 325,000 for December, which is well above consensus estimates. We will have to see if the govt. payrolls report confirms this strength.

Overall concerns remain in Europe, where bond yields continue to creep higher and recent deposit data from the ECB shows a continuation of recent trends. Europes markets are lower, as is the euro. And we know that when the euro is down our markets are down.

In other US economic data, the ISM Services Index rose to 52.6 in December from 52.0 the previous month. Nonetheless December's reading was slightly below consensus estimates.

Also, December same-store sales are coming out and are a mixed back. Despite some solid results, the retail etf (XRT) is lower on the day by -1.5% so far.

The Nasdaq is outperforming the SPX so far for a second day. Energy and industrial stocks are early laggards, while healthcare and tech are down the least.

Commodities are mostly lower. Oil prices are down near $102.75, gold prices are only slightly lower to $1608, and copper and silver prices are down as well.

The 10-year yield is lower to 1.95% after trying to get above the 2.0% level yesterday. And the VIX is up 2.3% but still relatively low at 22.75.

Trading comment: Yesterday's price action was pretty constructive as the market was lower for most of the day buy rallied late to finish up slightly. Today the market has already bounced from its early lows and we will see if buyers come back into the picture late in the day. I would have thought we would have bounced more from that strong ADP report, but with the euro down a lot I understand the concerns. Growth stocks look good in early trading. One of our recent trades ULTA is spiking back above its 50-day average, which is a good sign. And the surprise stock of the week SODA is up another 6% in early trading and up 23% for the week. Not bad.

KAM Advisors and/or its clients are long QQQ, SODA, ULTA, XRT