The major market averages climbed on Wednesday, as traders await the preliminary benchmark revision to payroll growth and the minutes from the Federal Reserve’s last meeting.
Early on and the S&P 500 (SP500) was +0.2%, the Nasdaq Composite (COMP:IND) was +0.1%, and the Dow (DJI) was +0.2%.
The 10-year Treasury yield (US10Y) was flat at 3.82%. The 2-year yield (US2Y) was down 2 basis pints to 3.96%.
The Bureau of Labor Statistics is expected to issue a preliminary benchmark revision to payroll growth for the 12 months ending March on Wednesday at 10 am ET.
Economists at Wells Fargo expect the reading to be at least 600K weaker than initially estimated. JPMorgan expects a decline of about 360K, while Goldman Sachs said it could be as large as 1M.
Jobs revisions won’t change the big picture, Pantheon Macroeconomics said.
“With those revisions in focus, a more risk-off tone prevailed yesterday, and investors moved to raise the probability that the Fed will start cutting rates with a 50bp move in September,” Deutsche Bank’s Henry Allen said
Markets have a heightened interest in the labor market, and these revisions are likely to be negative, UBS’ Paul Donovan said.
Major U.S. stock averages snapped their eight-day winning streak on Tuesday as investors started keying in on fresh indications about the Fed’s thinking on starting rate cuts next month.
“There wasn’t an obvious catalyst, and the S&P 500 was little changed on the day, but it was always going to be tough to sustain such a long run of gains, and several risks are now coming into focus again,” Allen said.
The economic calendar, includes the FOMC minutes slated to come later in the day.
“The Fed is late in cutting rates, but the relative stability of real borrowing rates means it is not a catastrophic error. The revisions to labor market data do emphasize the risks around Fed Chair Jerome Powell’s ‘data dependency’ approach,” Donovan added.
Read More: Nasdaq, S&P, Dow tick higher ahead of jobs growth revision and Fed minutes