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Jobless Claims to Set Tone Ahead of Jobs Friday

The European Central Bank’s post-meeting briefing and U.S. economic data will occupy markets Thursday as traders await Friday’s April employment report.

NYSE trader on Tablet
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NYSE trader on Tablet

Weekly jobless claims at 8:30 a.m. ET and the ISM non-manufacturing survey at 10 a.m. are both being watched for what they say about the state of the job market.

ISM manufacturing data on Tuesday was better than expected, and the non-manufacturing survey’s employment component could give some important clues on hiring in the services sector. There is also productivity and costs data at 8:30 a.m.

Retailers release monthly sales data Thursday, and there are dozens of companies reporting earnings, including GM, Kraft Foods, Apache, Beam, Cigna, Hyatt, Sara Lee and Viacom. AIG and LinkedIn report after the closing bell.

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Thomson Reuters expects the sales of chain stores it follows to increase by 1.5 percent, with discount retailers the strongest and drug stores and teen apparel, the weakest.

The ECB is not expected to make any changes in rates.

“The press conference will be of greater interest,” said Marc Chandler, chief currency strategist at Brown Brothers Harriman. “Last Friday, (ECB President Mario) Draghi came out to endorse a ‘growth pact.’ What does he mean? What does it entail? And for a central banker to be endorsing it, it’s a big deal,” said Chandler.

Draghi said euro zone nations needed a “growth pact” in addition to their agreements for fiscal discipline. Both German Chancellor Angela Merkel and French presidential candidateFrancois Hollande endorsed the idea.

Germany has been a proponent of austerity measures, but austerity and low or no growth is a toxic brew for some of the weaker nations of Europe.

“I think the Berlin consensus has run as far as it can because of the political backlash triggered by the poor economies. So the elections in France and Greece this weekend are both the cause and effect of this. The political instability brought on by austerity is triggering a political backlash and Draghi’s comments last week,” said Chandler.

Meanwhile, U.S. Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton are expected to attend a U.S.-China Strategic Economic Dialogue in Beijing, which is scheduled to kick off overnight.

Follow Patti Domm on Twitter: @pattidomm

Questions? Comments? Email us at marketinsider@cnbc.com

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  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

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