Pre-market futures are up slightly this morning, countering the slight selloff we saw during Tuesday\u2019s trading day. Economic news out ahead of the open bounced pre-markets higher momentarily, but currently we\u2019re +20 points on the Dow, +8 on the S&P 500 and +50 points on the Nasdaq. Bond yields crept up a bit following these reports and in anticipation of the Fed meeting this afternoon.<\/p>\n
Earnings reports ahead of the bell show a few big changes from expectations: Kraft Heinz KHC beat bottom-line earnings estimates by +7.8% to 69 cents per share in the quarter. V.F. Corp. VFC, the parent company of retail brands like Vans, Timberland, North Face and more, posted a slimmer-than-expected bottom-line loss, +31.5%. E-commerce marketplace Etsy ETSY, however, missed the Zacks consensus by -53.7% in the quarter.<\/p>\n
\u201cJobs Week\u201d continues this Hump Day with private-sector payrolls from Automated Data Processing ADP out this morning, coming in at +104K new private-sector jobs filled in July. This is a nice turnaround from the upwardly revised -23K reported for June, and well ahead of the consensus estimate for a mere +64K.<\/p>\n
The breakdown of this data more closely resembles the \u201caverage\u201d jobs report of the past, with Goods-producing jobs back up to around +30% of the total, +70% for Services, and the Leisure & Hospitality space leading all industries (+46K new private-sector jobs filled). Financials brought in +28K, Trade\/Transportation\/Utilities were +18K and Construction +15K. Education & Healthcare was the negative outlier: -38K.<\/p>\n
Small companies (sub-50 employees) brought in +12K new private-sector jobs, while both medium-sized firms (50-499 employees) and large businesses (over 500) made +46K new hires for the month. Job Stayers averaged out a +4.4% increase, while Job Changers bounced back 20 basis points (bps) month over month to +7.0% \u2014 both metrics having moderated over the past couple years.<\/p>\n
All in all, a solid month of privater-sector jobs growth. To paraphrase Mark Twain, \u201cThe reports of the death of the U.S. labor force have been greatly exaggerated.\u201d ADP Chief Economist Nela Richardson said in this morning\u2019s report, \u201cHiring and pay data is indicative of a healthy economy.\u201d That said, we do see a strong pullback in jobs growth back to late 2024: the trailing 4-month average ADP jobs growth is +43K; the prior 4-month average is +173K.<\/p>\n
The first print on Q2 Gross Domestic Product (GDP) outperformed expectations this morning: +3.0% versus the +2.3% anticipated \u2014 a nice bounceback from the -0.5% reported for Q1, and the strongest quarter for jobs growth (prior to pending future revisions) since +3.1% in Q3 of 2024. Meanwhile, the GDP Price Index came in lower than expected at +2.0%, the lowest since Q324, as well.<\/p>\n
Story Continues <\/p>\n
Consumption also bounced back to +1.4% from +0.5% in Q1. Also hotter than expected is the Core PCE Price Index, at +2.5%, 20 bps above expectations and the highest read since Q424. Thus, economic growth \u2014 even with the nightmare beginning to the quarter with the draconian tariff rates announced on April 2nd \u2014 has improved over estimates. Companies had been battening down the hatches in anticipation of a tough tariff climate, and when the storm blew over, they were able to reap the benefits.<\/p>\n
The big news (that\u2019s really not super-huge) comes out this afternoon, when the latest Federal Open Market Committee (FOMC) meeting concludes with a new monetary policy statement regarding interest rates at 2pm ET. Rates are not expected to change from the +4.25-4.50% in place since December. The economic reports this morning actually bear this out: the economy is growing strong \u2014 without runaway inflation \u2014 at these interest rate levels.<\/p>\n
The more interesting takeaway will be whether voting members Waller and Bowman \u2014 and any others we may not be aware of \u2014 counter Fed Chair Jerome Powell\u2019s argument for keeping rates steady. Over the past several FOMC meetings, voting members have been unanimous. We expect that to change today, at least somewhat.<\/p>\n
Q2 earnings season will also experience an eventful afternoon today, when Microsoft MSFT and Meta Platforms META report results after the closing bell. We\u2019ll also hear from Qualcomm QCOM and Ford F, among a bevy of others. Such is life in the heart of earnings season.<\/p>\n
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report<\/a><\/p>\n Ford Motor Company (F) : Free Stock Analysis Report<\/a><\/p>\n QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report<\/a><\/p>\n Microsoft Corporation (MSFT) : Free Stock Analysis Report<\/a><\/p>\n Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report<\/a><\/p>\n V.F. Corporation (VFC) : Free Stock Analysis Report<\/a><\/p>\n Etsy, Inc. (ETSY) : Free Stock Analysis Report<\/a><\/p>\n Kraft Heinz Company (KHC) : Free Stock Analysis Report<\/a><\/p>\n Meta Platforms, Inc. (META) : Free Stock Analysis Report<\/a><\/p>\n This article originally published on Zacks Investment Research (zacks.com).<\/a><\/p>\n