Wall Street Greek: Employment Reports: ADP, Challenger & Monster

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Nine economic reports are due to reach the wire today, so buckle your seat belt. A trio of employment reports set the stage for tomorrow's Labor Department tally of unemployment. Today, we received ADP's Private Employment Report, Challenger Gray & Christmas' Job-Cuts data and Monster Worldwide's Employment Index.

Employment Reports

ADP Private Employment Report

ADP's Private Employment Report produced a mildly positive result that seems unlikely to move the market, in our opinion. ADP reported nonfarm private payroll contraction of 473K in June, which would have marked a significant improvement from May. However, May was adjusted to a better place, with initially reported contraction of 532K jobs, cleaned up to 485K. We wonder if ADP did not seek ways to bring its May figure more in line with the Labor Department's May result, which was substantially lower. Also, we suspect the Labor Department might adjust its figure upward, making this change even more suspect. April's private market job cuts amounted to 491K, so looked at in another manner, not much has changed on the private market end of labor.

Challenger, Gray & Christmas Job-Cuts Report

Challenger, Gray & Christmas published its Job-Cut Report detailing announced corporate layoffs at 7:30 AM. Challenger offers a more clear cut view of an improving situation, as its June tally continued a trend of lower announced corporate layoffs. June's sum amounted to 74,393, which compared well with May's result of 111,182 job cuts (April 132,590). So where are the auto industry cuts then... perhaps more of those follow GM's emergence from bankruptcy; suppliers may have a longer lifespan than one month before more attrition comes naturally due; dealership jobs may not have amounted to a significant number when diluted by the general population. Your two-cents welcomed here, so comment below...

Mortgage Activity

The Mortgage Bankers Association produced its regular weekly data on mortgage activity in the early going. Last week's report showed an improvement in activity on a modest decrease in contracted fixed rate mortgages. For the week ended June 26, it looks like a rain out! Even as contracted 30-year fixed rate mortgages fell on average, to 5.34%, from 5.44%, the MBA's Market Composite Index decreased 18.9% on a seasonally adjustment basis. The Refinance Index dropped to its lowest mark since November 2008, down 30% from the prior week. Purchase Applications also fell 4.5%, despite recent stubborn rise through rate increase. We speculate this change had much to do with weather, though we have not compared rainfall levels scientifically.

Monster Employment Index

Monster Worldwide (NYSE: MWW) tracks the demand and supply of online job postings, and as the medium has taken market share from print, the metric has grown in importance. Monster's data acted as we expected, moving slightly lower from its prior reading. Monster reported its MEI backtracked slightly in June to 117, from 118 in May (120 in April).

ISM Manufacturing Index

ISM will publish its Manufacturing Index for June after the opening bell. May's data exposed a green shoot, as new orders showed expansionary activity. June, however, remains strained by rising unemployment and the intensifying burden that creates for the economy. Economists forecast a reading of 45.0 for June, versus the 42.8 seen in May.

Construction Spending

Construction Spending is due for report at 10:00, with Bloomberg's consensus of economists forecasting a May activity decline of 0.5% (+0.8% in April). This seems counter intuitive, given the recent Housing Start green shoot (+17.2% in May), but construction activity looks to be weighed still by prior "start" weakness.

Pending Home Sales

This leading indicator for the housing industry improved 6.7% in April, to 90.3, and further gains are expected for May when reported at 10:00 a.m. Indeed, housing and mortgage activity for purchases seem to have benefited from government stimulants, including the tax break for first time home buyers. We noted stubborn mortgage support in the starts segment over the past month, despite the rise in mortgage rates.

Motor Vehicle Sales

Intermittently during the day today, American automakers will publish their June Motor Vehicle Sales figures. Aggregate domestic sales improved to an annual pace of 7.3 million cars in May, versus the 6.9 million in April. Overall sales also improved, despite higher unemployment and rising gasoline prices. This likely reflects adjustment from the panic-level sales from when the market froze on concern tied to the bankruptcies of Chrysler and GM.

Petroleum Status

At 10:30, look for the EIA's Petroleum Status Report. Last week's data showed inventories of crude oil decreased by 3.8 million barrels, while gasoline increased by 3.9 million barrels. California might run out of money to pay its bills on Wednesday... guess no fireworks show in Cali?

Corporate News Drivers

General Mills (NYSE: GIS) posted better than expected results this morning, earning $0.86 a share after nonrecurring items, compared against analysts' consensus for $0.80, according to Reuters. The food maker noted benefit from lower commodity costs, and raised its full-year forecast for the current period.

The day's very light EPS schedule includes Constellation Brands (NYSE: STZ), General Mills (NYSE: GIS), DemandTec (Nasdaq: DMAN), Lindsay Corp. (NYSE: LNN), UniFirst (NYSE: UNF) and Unify Corp. (Nasdaq: UNFY).

Markets Overseas

Asia:

1. MSCI Asia APEX 50: +0.76%

2. Japan NIKKEI 225: -0.19%

3. Hong Kong Hang Seng: -0.81%

4. China CSI 300: +2.26%

5. India BSE SENSEX 30: +1.05%

Europe:

1. DJ Euro STOXX 50: +1.11%

2. UK FTSE 100: +1.27%

3. France CAC 40: +1.45%

4. Germany DAX: +1.26%

(Prices as of hour of publishing, which may not be the close)