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Stocks tread water ahead of employment report

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Stocks tread water ahead of employment report

Stocks in the US were buoyed on the open on the heels of Wednesday’s strong car sales results.  US car buyers purchased 1.5 million vehicles in August, up 17% from a year ago, with nearly all major auto makers reporting double-digit sales gains. Investors also needed to absorb private employment data released today by ADP which is generally a robust precursor to the government’s jobs report scheduled to be release on Friday at 1230 GMT.

Prior to the opening bell investors needed to absorb central bank data from the BOJ, ECB and the BoE.  All three central banks kept key interest rates unchanged, with the BOJ upgrading their economy and keeping their asset purchase program steady. Although there were expectations for the BOJ to ease policy, BOJ Governor Kuroda’s comments suggest he is poised to wait and make a decision based on future data.  Kuroda did hold out the possibility though that if the sales tax, threatens the economy, the BOJ could act and ease rates.

In the US, the ADP employment report showed that private payrolls gained 176K jobs compared to consensus estimates of 178K. Job growth was broad based, and steady, across all industries and company sizes.  The goods sector jobs increased by 11K, while financial activity jobs increased by 1K. Manufacturing jobs increased by 4K while construction increased by 5K. The July payrolls were revised lower by 2K.

Also on the employment front, jobless claims data showed robust results with the Department of Labor reporting that initial jobless claims declined by 9K in the week ending August 30, 2013.

Momentum on the S&P 500 index is turning positive as the MACD is poised to generate a buy signal.  The index is poised to move into positive territory which would foreshadow increasing prices.

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