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Pre-Market Primer: Payroll Growth Disappoints; Econ Data Tsunami and Fed Announcement to Come


The consensus is for slower growth in key areas last month.

US stock futures were hardly changed this morning as investors await a decision by the Federal Reserve and a bevy of key economic data points.

ADP, a provider of payroll services, reported that hiring in the private sector slowed in April. Payrolls increased by only 119,000 after gaining 158,000 in March. Economists were expecting a net of 155,000 new hires. This data doesn't bode well for the government's official non-farm payrolls and unemployment rate report this Friday.

Later this morning, a slew of important US economic data will come out, and economists' consensus estimates are for weaker growth. The US PMI manufacturing index is expected to show less robust growth in April than in March. The index is expected to fall to 52 from 54.6. PMI readings above the 50 threshold indicate growth in the sector. The Institute for Supply Management is also likely to show a slight fall to 51 from 51.3. Construction spending is expected to have risen only 0.6% in March, after gaining 1.2% in the previous month.

The biggest news of the day might come from the Federal Reserve, however. The Federal Open Markets Committee will make an announcement after its two-day meeting concludes at 2 p.m. EDT. The recent pullback in the economy and tame inflation might silence the hawks in the Fed. Rates are probably going to go untouched, but any updates on the Fed's plans to alter its $85 billion monthly asset purchase program could move the market considerably.

Asian markets fell overnight as the Chinese government's manufacturing PMI index showed a narrow gain. The index, which is more weighted toward large state-sponsored enterprises, fell to 50.6 in April from 50.9 in March. European shares also made gains today.

Yesterday, Apple (NASDAQ:AAPL) made the biggest corporate debt offering in nearly twenty years. It offered $17 billion in bonds at an average 10-year yield of 2.42%, just 75 basis points over a similar Treasury bond.

After ending Tuesday in positive territory, stocks are pointing toward a slightly higher opening today. Dow (INDEXDJX:.DJI) futures are up 0.02% at 14,751 and S&P (INDEXSP:.INX) futures rose 0.15% to 1,594.60. Futures on the Nasdaq (INDEXNASDAQ:.IXIC) index are up 0.16% at 2,884.50.

Facebook (NASDAQ:FB) could see heavy trading this session as its earnings are due to come out after the closing bell. Wall Street expects earnings of $0.13 per share. The conference call that follows might shed some light on the company's new smartphone interface and other plans to monetize its mobile users. Analysts might also ask about the trend of users in mature markets flocking to competitors' networks.

After wrapping up its merger with Metro PCS (NYSE:PCS), T-Mobile USA (NYSE:TMUS), which is a subsidiary of Deutsche Telekom (OTCMKTS:DTEGY), will make its debut on the New York Stock Exchange (NYSE:NYX) with the ticker TMUS.

Twitter: @vincent_trivett
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