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The economic calendar is much heavier today because of labor data and the compressed holiday week.

Jobs are a big psychological factor for traders, carrying the prospect of a strong rally based on improved employment numbers. As a result, the Challenger Job Cut and the ADP Employment reports will be closely watched.

The weekly MBA Purchase Applications will be reported at 7 a.m. ET. I focus on purchases, which traders consider a leading indicator of new economic activity as opposed to refinancing.

There are no estimates made for this report, but last week purchases came in at 180.3. A number that is higher by 5 percent or more would be bullish, while a reading that is lower by the same margin would be bearish.

The Challenger Job Cut report comes out at 7:30 a.m. ET. There is no forecast available for this release, but last month's number was 37,100, which is more or less a neutral reading.

It would take a tally well above 50,000 to be considered bearish, while a number that is well below 35,000 would be considered bullish. This report tracks layoffs that have been announced but not yet implemented, so traders consider it a leading indicator of employment trends.

The weekly ICSC/Goldman Store Sales report will be released at 7:45 a.m. ET. There are two parts to this release, the week-over-week and year-over-year comparisons. Most traders focus on the year-over-year number because it is a better indicator of the longer-term trend.

The last week-over-week change came in at a gain of 2.9 percent. The year-over-year data in the previous report showed a gain of 3 percent. Stronger-than-expected positive numbers would be seen as bullish, while negative numbers would be bearish.

The ADP Employment report will be released at 8 a.m. ET. Most economists expect payrolls to grow by 68,000, which would be a steep rise from last month's 38,000. There is a very wide range of estimates for this release, from a bearish 25,000 to bullish 175,000. The latter would be a level that would likely produced a major upside reaction.

The weekly Redbook Store Sales will be reported at 8:55 a.m. ET. As with the ICSC-Goldman report, there are two components to watch. One is the more volatile month-over-month change, and the other is the year-over-year comparison, which shows the broader trend best.

The last month-over-month change was a gain of 0.6 percent. The previous report's year-over-year data showed a gain of 2.5 percent. Negative numbers in either series would be bearish.

The ISM Non-Manufacturing Index comes out at 10 a.m. ET. The consensus expectation calls for the index to show a small drop to 54 from the previous month's 54.6. The estimates range from a bearish drop to 51.5 to a more bullish rise to 55.5.

Source: Challenger, ADP Labor Data on Today's Docket