Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow.
1. June Payrolls Expected to Rise 200,000 With Jobless Rate Steady
The U.S. Labor Department will issue what are widely considered among the most important economic numbers Friday at 8:30 AM ET (12:30 GMT) when it releases figures for June employment.
Nonfarm payrolls are forecast to have risen by 200,000 last month, compared with a rise of 223,000 in May.
Economists expect that the unemployment rate stayed steady at 3.8% last month, matching the low last seen in April 2000. That’s as low as the jobless rate has been since it hit 3.5% in December 1969.
Average hourly earnings are forecast to have risen 0.3% in June, the same as the month before.
According to Thursday’s ADP report, private employers added 177,000 jobs in June, fewer than the 190,000 gain economists predicted. Private sector jobs growth was revised to 189,000 in May from a previously reported 178,000.
As payrolls keep increasing, investors will be looking for signs from companies that the move toward full employment is impacting their ability to fill positions with qualified personnel.
2. U.S.-China Tariffs Going Into Effect
Even with the jobs numbers coming out, market volume will be low on a holiday-week summer Friday. That will make an already trade-talk-sensitive market susceptible to jawboning from either the U.S. or its allies.
The market was buoyed by reports on Thursday that the U.S. would be willing to forego any tariffs on European Union vehicles if the EU lifted duties on American autos.
The Nasdaq OMX global auto index finished the day about 1.2% higher.
Also, the tit-for-tat $34 billion tariffs between the U.S. and China go into effect tomorrow at 12:01 AM ET (04:01 GMT). China has said it will not fire the first shot, but will act in response to U.S. tariffs.
The Federal Reserve minutes for the June rate meeting indicated some concern of the FOMC about the economic impact of tariffs.
“Most participants noted that uncertainty and risks associated with trade policy had intensified and were concerned that such uncertainty and risks eventually could have negative effects on business sentiment and investment spending,” the minutes said.
3. Look out for Yield Curve Jitters
Financial stocks may see some bigger-than-usual moves, especially with the low volume tomorrow, as investors speculate about the yield curve.
The yield curve is especially important to banks, which pay out at lower short-term rates, but loan at higher long-term rates. And it hit the Fed’s radar at its June meeting.
“A number of participants thought it would be important to continue to monitor the slope of the yield curve, given the historical regularity that an inverted yield curve has indicated an increased risk of recession in the United States,” the Fed minutes said.