U.S. has just released ADP Employment Change report for July. The report indicated that private businesses created just 330,000 jobs compared to analyst consensus of 695,000.
This report is very important as job market data serves as one of the key catalysts for the Fed when it determines when to cut support to markets.
S&P 500 futures moved lower after the release of the disappointing ADP Employment Change report. However, it remains to be seen whether this report will serve as a serious negative catalyst as weak job market data may lead to more support from the Fed.
Today, traders will also take a look at the final reading of Services PMI report for July. Analysts expect that Services PMI declined from 64.6 in June to 59.8 in July. Numbers above 50 show expansion.
WTI Oil Declines For The Third Day In A Row
WTI oil is currently trying to settle below $69.50 as traders remain worried about the spread of the Delta variant of coronavirus in U.S. and China.
In the U.S., private companies have introduced various measures like vaccinations and masks while New York City demanded proof of vaccination for entry into gyms and restaurants.
China has recently reported the biggest number of new coronavirus cases since January, and oil traders worry that the country will soon introduce additional restrictions on travel which will hurt demand for oil.
Yesterday, oil-related stocks gained some ground as strong results from BP provided support to the segment. Today, they will find themselves under pressure at the beginning of the trading session as WTI oil managed to settle below the psychologically important $70 level.
Precious Metals Move Higher Amid Virus Worries
Gold and silver gained upside momentum today as demand for precious metals increased amid virus worries. There were no significant moves in the foreign exchange market or U.S. government bond market, so precious metals enjoyed strong support as demand for alternative safe-haven assets increased after a major rally in Treasuries.
This is bullish for gold mining stocks which have been mostly stuck in a tight range in recent trading sessions. If they manage to get out of this range, gold mining stocks will have a good chance to develop additional upside momentum.