ADP Employment Report
by Tom on January 8, 2009
in Market Musings
Nonfarm private employment decreased 693,000 from November to December 2008 on a seasonally adjusted basis, according to the ADP National Employment Report®.
Tom here – the really important jobs number comes tomorrow morning at 8:30 with the “official” jobs report but with the ADP report coming in at a negative 693,000, that doesn’t bode well for tomorrow.
How are the markets going to react? Here’s my guestimate:
- The stock market is going to see a really bad number (over 500,000 jobs) as a reason to sell off.
- The money leaving the stock market is going to be looking for somewhere to go and is going to go into Treasuries, increasing the difference between mortgage backed securities and the bond market.
- The really bad news economically (and we’ve seen some of it lately) is going to increase the call for stimulus packages which could add lots of additional costs to the Federal government’s already mounting bill.
So, long story short, here’s my estimate of what’s going to happen tomorrow:
- The jobs report will come in really ugly.
- The markets will tank even more.
- Mortgage rates will remain stable or inch up just a small amount.
Going to be an interesting day tomorrow.
