Advertisement
Canada markets closed
  • S&P/TSX

    22,167.03
    +59.95 (+0.27%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CAD/USD

    0.7386
    +0.0013 (+0.18%)
     
  • CRUDE OIL

    83.09
    +1.74 (+2.14%)
     
  • Bitcoin CAD

    95,779.91
    +2,586.76 (+2.78%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,253.50
    +40.80 (+1.84%)
     
  • RUSSELL 2000

    2,124.55
    +10.20 (+0.48%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • NASDAQ

    16,379.46
    -20.06 (-0.12%)
     
  • VOLATILITY

    13.01
    +0.23 (+1.80%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6844
    +0.0039 (+0.57%)
     

3 things to watch as you trade today

Here are three things you should watch as you're trading today.

Number 1: Jobs, jobs, jobs

The monthly employment report, of course. But what piece of it will be seized on as hero or villain to explain the day’s market action after the fact?

The collective expectation for the headline gain in American payrolls for February sits at 230,000 – a healthy figure but one that would mean a slowing from 257,000 in January and upwardly revised prints above 300,000 for November and December.

The payroll report has arrived above Street forecasts for three straight months. Note that since the job gains began to pick up two years ago, we haven’t seen four consecutive months of upside surprise for this figure. If we come in light, you can expect the spreadsheet-addled economists to cut the economy a break with talk of severe winter weather, the West Coast port strike and energy companies reckoning with crashing crude prices.

ADVERTISEMENT

During the entire jobs recovery, the “key number” within the report has shifted around a few times. For a while all that mattered was the labor force participation rate, as folks quitting the employment racket flattered the unemployment rate.

Related: The jobs recovery is weaker than it seems

More recently, we were fixating on average hourly earnings, for signs of paycheck momentum that Fed chair Janet Yellen presumably wanted to take hold before cinching up interest rates.

That will still matter, but private-sector moves to lift starting wages at the low end have made the point that the labor market is firming nicely.

The real thing to watch is not the dissection of the data itself but the dollar – king dollar restored to its throne. The US dollar Index is up nine straight months – a record streak – and has gained a stunning 20% in the past year, as the entire world agrees that the US economy has separated itself nicely from the rest of the developed world and rates will go up here long before they do in Europe, Japan, Canada, Austrailia, or almost anywhere else you can book a direct flight to.

So watch this extended, consensus-backed rally in the dollar. If it gathers more strength on a decent jobs number – or, especially, a soft one – it’ll start talk that the currency is “doing the tightening for the Fed,” dampening inflation and pressuring corporate profits further.

A dollar retreat on a good payroll report might suggest the rally has already pulled most everyone aboard.

Number 2: The devil’s anniversary

It was six years ago – on March 6, 2009, a Friday – that the S&P 500 (^GSPC) index traded down to 6-6-6. That was an intraday print, and the ultimate low closing level was 676 the following Monday. But the ominous 666 level would prove the low for the calamitous bear market of 2008 and 2009.

A ferocious rally then began, of course. Considered by many a mere bear market pause at the time, it developed into one of the most generous and relentless bull markets ever.

In the six years since the devilish low, the S&P 500 has more than tripled, delivering a 21% annualized return even before dividends are counted. The Nasdaq (^IXIC) has quadrupled to re-touch the 5000 level. And we are surrounded less by celebration than by a constant bubble watch.

Get the Latest Market Data and News with the Yahoo Finance App

Yesterday billionaire celebrity entrepreneur Mark Cuban got a day’s worth of chatter flying by calling a privately financed app startup bubble. If that’s our biggest problem, we’re OK. And if we need to witness a giddy and all-encompassing greed binge that is as palpable as the consuming terror of that day six years ago - when we didn’t even know if the system would hold together - we’re not there yet.

But, of course, we might not be guaranteed such a perfectly parallel signal before the fun stops with this aging but still sturdy bull market.

Number 3: Gap earnings

Gap (GPS) is an easy company to respect but a hard one to love. It invented mall-based casual basic clothes, its founding family has proved to be fine stewards of the business and recent management has kept margins up and shared generous cash flows with shareholders.

But the three retail brands – Old Navy, Gap and Banana Republic – never seem to be clicking at once, and customer-traffic trends have grown more erratic than one would like for people selling khakis and T-shirts.

Now, with newly installed CEO, Art Peck, Wall Street wants to believe, but is getting mixed signals. A decent earnings report last month lifted its shares, but last night sales for February showed an unexpected decline, especially at Gap and Banana Republic.

Related: Old Navy boosts The Gap; J.C. Penney disappoints; Weight Watchers' thin forecast

The key here is to watch how the stock trades today after backing off a bit after hours. The shares bounced a couple of times down near the $40 level this year and are well above the October depths.

It’s an inexpensive stock and investors are hungry for a revival story in their focus on a resurgent U.S. consumer. How the stock acts today will give a good read on how much slack investors are willing to cut Peck as he undertakes this task.

More from Yahoo Finance
Why the fake president on 'House of Cards' is better than the real one2 offbeat companies with fat dividend yields
Dunkin' shares set to deliver, Kroger killing it