Stock Market Update

The stock market is on track for a slightly higher opening amid a fresh wave of earnings reports, economic data, and the impending FOMC decision at 14:00 ET.

The ADP Employment Change Report for July showed private sector employment increasing by 104,000 (Briefing.com consensus: 78,000) following an upwardly revised decline of 23,000 (from -33,000) in June.

The key takeaway is that, while the overall employment growth was modest, it was broad-based with gains for small, medium, and large establishments. In brief, it was not a report that signals any material weakness in the labor market.

The Advance Q2 GDP report showed real GDP increasing at an annual rate of 3.0% (Briefing.com consensus: 2.5%) following a 0.5% decline for the first quarter. The GDP Deflator increased 2.0% (Briefing.com consensus: 2.6%) following a 3.8% increase in the first quarter.

The key takeaway from the report is the recognition that the stronger growth was fueled by the decrease in imports (-30.3%), which are a subtraction in the calculation of GDP. The net exports component contributed 4.99 percentage points to Q2 GDP growth.