Core Insights - The government shutdown has led to a "data fog," causing reliance on private data sources to assess economic conditions [1] - The ADP National Employment Report indicates a surprising increase in private-sector employment for October [2] Employment Data - The ADP payroll report, based on anonymized data from over 26 million private-sector employees, provides a high-frequency view of the labor market [3][4] - In October, private-sector employment rose by 42,000 jobs, with a year-over-year pay increase of 4.5% [5] - The growth in employment was primarily driven by the education, health care, and trade, transportation, and utilities sectors [5] Job Losses and Sector Performance - For the third consecutive month, job losses occurred in professional business services, information, and leisure and hospitality sectors [6] - The breakdown of job changes by industry shows: - Goods-producing: 9,000 jobs - Service-providing: 33,000 jobs [9] - Regional job changes indicate: - Northeast: -12,000 - Midwest: 9,000 - South: 6,000 - West: 40,000 [10] Detailed Sector Analysis - Specific job changes by sector include: - Natural resources/mining: 7,000 - Construction: 5,000 - Manufacturing: -3,000 - Trade/transportation/utilities: 47,000 - Information: -17,000 - Financial activities: 11,000 - Professional/business services: -15,000 - Education/health services: 26,000 - Leisure/hospitality: -6,000 - Other services: -13,000 [11]

Core Insights - The U.S. government shutdown has led to the suspension of several key economic statistics, making unofficial data crucial for investors to monitor the U.S. economy [1] - The ADP employment report for October indicates stronger-than-expected job growth in the private sector, with 42,000 jobs added, surpassing the Dow Jones estimate of 22,000 [1][2] - The report shows a mixed performance across industries, with significant job gains in trade, transportation, and utilities, while the information services sector experienced a decline [2] Employment Data Summary - In October, the trade, transportation, and utilities sectors added 47,000 jobs, education and health services added 26,000 jobs, and financial activities increased by 11,000 jobs [2] - The information services sector saw a reduction of 17,000 jobs, while professional and business services lost 15,000 jobs, and other services decreased by 13,000 jobs [2] - Manufacturing jobs decreased by 3,000, indicating limited success in bringing manufacturing jobs back to the U.S. [2] Company Size Analysis - Large companies (over 500 employees) added 73,000 jobs, while medium-sized companies lost 21,000 jobs, and small businesses saw a reduction of 10,000 jobs [2] - The average monthly job growth in the first half of the year was about 60,000, but this figure has significantly declined in the second half [3] Wage Growth Insights - Despite a slowdown in job growth, wages continue to rise, with wages for current employees increasing by 4.5% year-over-year, and job switchers seeing a 6.7% increase [2] - ADP's Chief Economist Nela Richardson noted that while job growth has slowed, the balance between supply and demand in the labor market remains stable [2] Federal Reserve Outlook - The Federal Reserve is increasingly concerned about the employment market, with a 70.1% probability of a 25 basis point rate cut in December [4] - There is significant internal disagreement within the Federal Reserve regarding the continuation of rate cuts, with some officials advocating for a more aggressive approach [4][5] - Upcoming data releases, including the Challenger, Gray & Christmas monthly layoff report and initial jobless claims, will be closely monitored for insights into employment trends [5]

Labor Market Insights - The October ADP private-sector payroll report indicates an addition of +42K new jobs, surpassing expectations by +20K and reversing the previous month's downward revision of -29K [2] - Despite this positive report, the American labor market shows signs of decline, with an average gain of only +29K new jobs over the last four months, a decrease from +53K and +197K in the previous two four-month periods [3] Job Growth by Sector - Goods-producing jobs increased by +9K, while services jobs rose by +33K, with large firms (over 500 employees) contributing +73K to the job growth, contrasting with negative growth in small and medium-sized companies [4] - The Trade/Transportation/Utilities sector led job growth with +47K, followed by Education/Healthcare at +26K, while Leisure/Hospitality and Professional/Business Services saw declines of -6K and -15K respectively [5] Wage Trends - Wage gains for job stayers averaged +4.5%, while job changers saw an increase of +6.7%, indicating a narrowing historical gap and suggesting less urgency for employees to seek new positions [6] Company Earnings Reports - McDonald's (MCD) reported earnings of $3.22 per share, missing estimates of $3.35, but same-store sales increased by +3.6%, leading to a +3% rise in pre-market trading [7] - Humana (HUM) exceeded earnings expectations with $3.24 per share, a +11.34% beat, and revenues of $32.65 billion, but lowered guidance caused shares to drop by -5.5% [8] - Aurora Cannabis (ACB) reported earnings of $0.09 per share, a +200% surprise compared to expectations, with record quarterly revenues of $70.5 million, up +15% year-over-year, resulting in a +9% increase in pre-market trading [9]

Group 1: ADP Private-Sector Payroll Report - The ADP private-sector payroll report for October shows an increase of +42K new positions, exceeding expectations by +20K and marking a positive shift from a revised -29K the previous month [2][3] - Despite the positive report, the American labor market is in decline, averaging only +29K new jobs over the last four months compared to +53K and +197K in the previous two four-month periods [3] - Job growth was driven by large firms (over 500 employees) which added +73K jobs, while small and medium-sized companies experienced negative growth [4] Group 2: Industry Breakdown - The Trade/Transportation/Utilities sector led job growth with an increase of +47K, followed by Education/Healthcare at +26K, while Leisure/Hospitality and Professional/Business Services saw declines of -6K and -15K respectively [5] - Wage gains for job stayers averaged +4.5%, while job changers saw an increase of +6.7%, indicating a narrowing gap in wage growth between the two groups [6] Group 3: Q3 Earnings Results - McDonald's reported earnings of $3.22 per share, missing estimates of $3.35, but same-store sales rose +3.6%, leading to a +3% increase in pre-market trading [7] - Humana posted earnings of $3.24 per share, beating expectations by +11.34%, but lowered guidance resulted in a -5.5% drop in shares [8] - Aurora Cannabis achieved a significant earnings surprise with $0.09 per share compared to the anticipated $0.03, and revenues reached a record $70.5 million, up +15% year over year, resulting in a +9% increase in pre-market shares [9]

Core Insights - The private sector added 42,000 jobs in October, marking a recovery from a loss of 32,000 jobs in September, with the trade, transportation, and utilities industry leading the growth [1][2] - Job growth was modest compared to earlier in the year, with ADP Chief Economist noting that this was the first job addition since July [2] - Year-over-year pay growth remained flat, with job-stayers seeing a 4.5% increase and job-changers at 6.7%, indicating a balance in supply and demand [3] Industry Performance - Five industries added jobs in October: - Trade, transportation, and utilities: +47,000 jobs - Education and health services: +26,000 jobs - Financial activities: +11,000 jobs - Natural resources and mining: +7,000 jobs - Construction: +5,000 jobs [6] - Five industries experienced job losses: - Information: -17,000 jobs - Professional and business services: -15,000 jobs - Other services: -13,000 jobs - Leisure and hospitality: -6,000 jobs - Manufacturing: -3,000 jobs [6] Establishment Size Impact - Only large establishments (500 or more employees) added jobs, contributing 73,000 jobs - Small businesses (1-49 employees) cut 10,000 jobs, while medium establishments (50-499 employees) reduced their workforce by 21,000 [7]

Core Viewpoint - The U.S. government shutdown has led to the suspension of several key economic statistics, making unofficial data, such as the ADP employment report, crucial for investors to gauge the state of the U.S. economy [1] Employment Data - The ADP report indicates that private sector employment grew by 42,000 jobs in October, surpassing the Dow Jones estimate of 22,000 jobs [1] - The September employment data was revised from a loss of 29,000 jobs to a loss of only 3,000 jobs [1] - Employment increased in the trade, transportation, and utilities sector by 47,000 jobs, while education and health services added 26,000 jobs, and financial activities saw an increase of 11,000 jobs [1][2] - The information services sector experienced a decline of 17,000 jobs, with other sectors like professional and business services and other services also seeing reductions [1][2] - Manufacturing jobs decreased by 3,000 in October, indicating limited success in bringing manufacturing jobs back to the U.S. [1] Wage Growth - Despite a slowdown in job growth, wages continue to rise, with wages for current employees increasing by 4.5% year-over-year, remaining stable from September, while job switchers saw a wage increase of 6.7% [2] Employment Trends - On average, employment grew by about 60,000 jobs per month in the first half of the year, but this figure has significantly declined in the second half [3] - The ADP employment data is considered a leading indicator for the non-farm payroll data released by the U.S. Bureau of Labor Statistics [3] Federal Reserve Insights - Federal Reserve officials express concern over employment data, indicating a shift in focus from inflation rates to the labor market [4] - The probability of a 25 basis point rate cut in December is estimated at 70.1%, with a 29.9% chance of maintaining current rates [4] - There is significant internal disagreement within the Federal Reserve regarding the continuation of rate cuts, with some members advocating for a more aggressive approach [4][5]

Core Insights - The ADP report indicates a stronger-than-expected growth in private sector wages for October, suggesting that the labor market is not in imminent danger of collapse [1] - October saw an increase of 42,000 jobs, the largest gain since July 2025, surpassing the expected increase of 28,000 jobs [1] - The report highlights a mixed employment landscape, with certain sectors showing growth while others continue to experience job losses [4] Employment Changes by Sector - In October, the construction sector added 5,000 jobs, recovering from a loss of 5,000 jobs in September, with wage growth remaining steady at an annual rate of 4.5% [2] - The manufacturing sector saw a decrease of 3,000 jobs in October, following a loss of 2,000 jobs in September, with wage growth slightly increasing to 4.8% from 4.7% [2] - The trade, transportation, and utilities sector experienced a significant increase of 47,000 jobs in October, rebounding from a loss of 7,000 jobs in September, with wage growth stable at 4.3% [2] Financial Services and Professional Services - The financial services sector added 11,000 jobs in October, recovering from a loss of 9,000 jobs in September, with wage growth remaining at 5.2% [3] - Conversely, the professional and business services sector lost 15,000 jobs in October, following a loss of 13,000 jobs in September, with wage growth unchanged at 4.2% [4] Economic Context and Future Outlook - The ADP report is seen as a critical indicator of the U.S. labor market, especially amid ongoing government shutdowns affecting the release of official employment data [4] - Economists advise caution in interpreting the ADP data due to its reliance on private sector payrolls, which may not fully represent the national employment landscape [5] - The Federal Reserve is increasingly concerned about the labor market's weakening, with recent interest rate cuts reflecting this sentiment, although future rate cuts remain uncertain [5]

Core Insights - The ADP jobs report indicates a gain of 42,000 private-sector jobs for October, surpassing forecasts of 25,000, while September's report was revised to show a loss of 29,000 jobs from an initial estimate of -32,000 [3] - The S&P 500 futures remained relatively unchanged following the jobs data, with Advanced Micro Devices (AMD) experiencing a modest decline after its earnings report [1][6] - Federal Reserve Chairman Jerome Powell's comments suggest that a December rate cut is uncertain, with the odds of a cut dropping to 70% from 85% after the ADP report [2][4] ADP Jobs Report - The ADP report's gain of 42,000 jobs is significant as it reflects a return to modest job growth amidst a government shutdown that has affected the Bureau of Labor Statistics' reporting [3] - The report's implications extend to the Federal Reserve's monetary policy, as Powell noted that the break-even monthly employment gain has decreased to less than 50,000 due to a slowdown in immigration [4][5] Federal Reserve Rate-Cut Outlook - Following the ADP jobs report, the likelihood of a Federal Reserve rate cut on December 10 has decreased to 70%, indicating a shift in market expectations [4] - Powell highlighted the trend of layoffs and reduced hiring among large companies due to AI productivity gains, suggesting that as long as inflation remains controlled, the Fed may lower rates further [5] S&P 500 Market Reaction - The S&P 500 futures were flat in early trading after a 1.2% decline on Tuesday, leaving the index 1.7% below its all-time closing high from October 28 [6] - The market's reaction to the jobs data and AMD's earnings report reflects broader investor sentiment and uncertainty regarding economic conditions [1][6]

Core Insights - Private sector employment increased by 42,000 jobs in October, marking a rebound from previous months of weak hiring, although the growth was not broad-based [1][3][4] - Year-over-year pay growth remained unchanged at 4.5% for job-stayers and 6.7% for job-changers, indicating a balance in supply and demand in the labor market [2][6] Employment Changes - Job growth by industry showed significant contributions from education and health care, and trade, transportation, and utilities, while professional business services, information, and leisure and hospitality sectors experienced job losses [3][4] - The breakdown of job changes by establishment size revealed that large establishments (500+ employees) added 73,000 jobs, while small and medium establishments lost 10,000 and 21,000 jobs respectively [4][5] Regional Employment Trends - Employment changes varied by region, with the West adding 40,000 jobs, while the Northeast saw a decline of 12,000 jobs [4][5] - Specific regional performance included a gain of 7,000 jobs in New England and a loss of 20,000 jobs in the Mid-Atlantic [5] Pay Insights - Pay growth for job-stayers was consistent at 4.5%, with variations across different firm sizes, where large firms reported a median change of 4.9% [6][9] - The pay growth for job-changers was notably higher at 6.7%, reflecting a trend where employees switching jobs are experiencing better pay increases [6] Additional Information - The total number of jobs added in September was revised from -32,000 to -29,000, indicating a slight improvement in previous estimates [7] - The next ADP National Employment Report is scheduled for release on December 3, 2025 [7]

Core Insights - The industrials sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1][2] Company Summaries - **Automatic Data Processing Inc (NASDAQ:ADP)**: Reported quarterly revenues of $5.18 billion, exceeding analyst expectations of $5.14 billion, with a year-over-year revenue increase of 7%. The company maintains a revenue growth outlook of 5%-6% for the fiscal year, with adjusted diluted EPS growth projected at 8%-10%. The stock has fallen approximately 11% in the past month, with a 52-week low of $255.16 and an RSI value of 25.6 [7] - **Alamo Group Inc (NYSE:ALG)**: Set to release third-quarter financial results on November 6. The stock has decreased around 7% over the past month, with a 52-week low of $157.07 and an RSI value of 26.3 [7] - **Apogee Enterprises Inc (NASDAQ:APOG)**: Reported better-than-expected second-quarter results, with revenue growth in Performance Surfaces and Architectural Services. The stock has dropped about 33% in the last five days, reaching a 52-week low of $1.52, and has an RSI value of 26.7 [7]