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Economic and Market Overview - The first half of 2025 ended with major stock market indexes at record highs, but early trading in the second half is showing a pullback due to ongoing uncertainties [1] - A significant tax bill, referred to as the "Big Beautiful Bill," is expected to pass, which would make corporate tax cuts permanent, potentially adding over $3 trillion to the national debt over the next decade [2] - Trade negotiations are ongoing, with the EU and Japan in detailed talks with the U.S., while a preliminary outline of a trade deal with the UK has been reached [3] Employment and Labor Market - Employment numbers are anticipated to show a slight recovery, with private-sector payrolls expected to reach around 100K and nonfarm payrolls estimated at 110K, which would offset retiring Baby Boomers [4] - The labor market is showing signs of weakness, which may prompt the Federal Reserve to consider lowering interest rates, potentially benefiting industries like housing [5] Market Data and Indicators - Key economic data to be released includes final S&P and ISM Manufacturing PMI for June, Construction Spending for May, and Job Openings and Labor Turnover Survey (JOLTS) for May, with construction spending projected to improve slightly [6] - JOLTS data is expected to show a slight decline in job openings to 7.3 million, down from 7.39 million in April, indicating a significant drop from the peak levels earlier in the year [7] - The Professional & Business Services sector is experiencing a discrepancy, with a reported increase in job openings despite a loss of positions in the previous month, suggesting potential shifts in business spending [8]

Market Performance - Market indexes are at all-time highs, with the S&P 500 and Nasdaq leading, and a +20% increase from near-term lows in early April 2025 [1] - The Nasdaq has experienced a +17.2% increase in Q2 2025, marking its best performance since Q2 2020 [6] - The Dow is currently -2.7% from all-time highs, but has gained +230 points recently, while the S&P 500 and Nasdaq have also seen increases of +20 and +120 points respectively [6] Economic Indicators - The week is significant for job-related reports, including the Job Openings and Labor Turnover Survey (JOLTS), ADP private-sector payrolls, and the U.S. Employment Report [2] - ADP figures show a low of +37K, with negative monthly changes in Professional/Business Services (-17K), Education/Healthcare (-13K), and Trade/Transportation/Utilities (-4K) [3] - Continuing Jobless Claims reached their highest level in 3.5 years, nearing 2 million for the week [3] Upcoming Reports - Key reports expected this week include final prints on U.S. Manufacturing and Services PMI, Construction spending, Factory Orders, and Auto Sales [4] - The Chicago Business Barometer (PMI) for June is anticipated to rise to 43.0 from 40.5, indicating improved business outlooks [5]

Group 1 - ADP is scheduled to release its financial results for the fourth fiscal quarter ending June 30, 2025, before the opening of Nasdaq on July 30, 2025 [1] - A conference call will be held at 8:30 a.m. ET on July 30, 2025, featuring key executives including Maria Black, Peter Hadley, and Matthew Keating [2] - ADP will no longer publish financial results over a news wire service; instead, results will be posted on the Investor Relations section of its website [3] Group 2 - Investors and interested participants can listen to the conference call and view the accompanying slide presentation via live webcast on ADP's website [4] - The slide presentation will be available shortly before the webcast [4] - ADP focuses on designing better ways to work through innovative products and services in Human Capital Management [5]

Core Viewpoint - Automatic Data Processing, Inc. (NASDAQ: ADP) is initiated with a Strong Buy rating and a price target of $296.5, indicating a positive outlook for the company's stock performance [1]. Company Overview - Automatic Data Processing, Inc. provides essential cloud-based Human Capital Management (HCM) and HR outsourcing solutions for organizations of all sizes [1]. Research Methodology - Moretus Research employs a structured, repeatable framework to identify companies with durable business models, mispriced cash flow potential, and intelligent capital allocation [1]. - The research combines rigorous fundamental analysis with a judgment-driven process, focusing on clarity and relevance rather than complex forecasting [1]. Valuation Approach - Valuation is based on pragmatic, sector-relevant multiples tailored to each company's business model and capital structure, emphasizing comparability and simplicity [1]. - The research coverage tends to favor underappreciated companies undergoing structural changes or temporary dislocations, where dispassionate analysis can lead to asymmetric returns [1]. Research Standards - Moretus Research aims to elevate the standard for independent investment research by providing professional-grade insights and actionable valuation [1].

Summary of ADP's Investor Day Conference Company Overview - **Company**: ADP (Automatic Data Processing) - **Industry**: Human Capital Management (HCM) - **Fiscal Year 2024 Revenue**: Over $19 billion [7] - **Client Base**: 1.1 million clients, including 80% of Fortune 500 companies [7] - **Employee Payroll**: Over 42 million wage earners in more than 140 countries [7] - **Client Funds Movement**: Over $3.1 trillion annually in the U.S. [7] Core Points and Arguments Market Position and Growth - ADP is the world's largest HCM provider, emphasizing scale, dependability, and innovation as key differentiators [6][11] - The total addressable market for HCM exceeds $180 billion globally, with expected mid-single-digit growth [12] - ADP's market share has remained stable despite revenue growth, indicating significant room for expansion [13] Innovation and Technology - ADP is infusing AI into its operations to enhance product offerings and client experiences [3][20] - The company invested nearly $1.3 billion in R&D in fiscal 2024, focusing on AI as the next frontier [20] - ADP Assist, an AI-driven tool, has been recognized for its innovation and is being deployed across various functions [27] Strategic Priorities - **Best-in-Class HCM Technology**: Focus on developing innovative solutions and considering acquisitions to accelerate growth [21] - **Expertise in Outsourcing**: Providing unmatched client service across all client types [22] - **Global Scale**: Leveraging extensive data and partnerships to navigate the changing work environment [23] Client-Centric Approach - ADP emphasizes a client-first philosophy, with a commitment to understanding and addressing client needs [16] - Client satisfaction scores have increased by 40% over the past three years, reflecting strong revenue retention [29] Additional Important Insights Challenges in the HCM Industry - The industry faces challenges such as shifting demographics, rising healthcare costs, and a shrinking talent pool [15] - The regulatory landscape is continuously evolving, necessitating adaptive solutions [14] Product Portfolio and Differentiation - ADP's product offerings span from payroll to HR outsourcing, catering to businesses of all sizes [8][60] - The company is focused on creating a seamless user experience across its platforms, integrating various functionalities [61] Sales and Distribution Strategy - ADP has a large sales force of 8,500, with a significant portion of new business coming from partnerships [79][81] - The company aims to enhance sales productivity through AI tools and targeted marketing strategies [82][86] Future Outlook - ADP is optimistic about the HCM industry's growth potential and its ability to innovate and adapt to market changes [30] - The company plans to continue leveraging its scale and data to enhance product offerings and client experiences [31] Conclusion ADP's Investor Day highlighted the company's strong market position, commitment to innovation, and client-centric approach. With a focus on leveraging AI and expanding its global reach, ADP is well-positioned for future growth in the evolving HCM landscape.

ADP's Scale and Market Position - ADP's FY24 revenue reached $19 billion[9] - ADP serves over 1.1 million clients globally[10] - ADP processes 78 million employee tax statements[11] - ADP pays over 42 million employees in 140+ countries and territories[11] - ADP moves $3.1 trillion in client funds in the US[11] - ADP's total addressable market in HCM is $180 billion[25] Growth and Innovation - ADP targets 6-7% Employer Services (ES) new business bookings growth in the medium term[126] - ADP has nearly doubled seller headcount since FY10[123] - ADP has achieved a 40%+ increase in ADP weighted average Net Promoter Score over the last three years[51] - ADP is aiming for 8-10% revenue growth and 9-11% adjusted EPS growth in the medium term[217]

Group 1 - The primary goal of the "High Income DIY Portfolios" Marketplace service is to achieve high income with low risk and capital preservation [1] - The service provides DIY investors with essential information and portfolio/asset allocation strategies aimed at creating stable, long-term passive income with sustainable yields [1] - The portfolios are specifically designed for income investors, including retirees or near-retirees, and include seven portfolios: 3 buy-and-hold, 3 rotational portfolios, and a 3-bucket NPP model portfolio [1] Group 2 - The offering includes two high-income portfolios, two dividend growth investing (DGI) portfolios, and a conservative NPP strategy portfolio characterized by low drawdowns and high growth potential [1]

Group 1 - The core point of the article highlights that the U.S. private sector added only 37,000 jobs in May, significantly below the market expectation of 110,000 and the previous month's figure of 62,000, marking the lowest level since March 2023 [1][6] - The report indicates that the majority of new jobs were in the service sector, particularly in leisure and hospitality, while manufacturing jobs decreased by 3,000 [6] - The uncertainty surrounding U.S. trade policies is cited as a major factor contributing to the reduced demand for hiring, with companies hesitant to recruit new employees [3][6] Group 2 - The Federal Reserve's latest Beige Book reported a decline in labor demand, reduced working hours, hiring freezes, and plans for layoffs across all regions [8] - The term "tariffs" appeared 122 times in the Beige Book, indicating a strong focus on how tariff policies are increasing economic uncertainty [12] - Federal Reserve Chairman Jerome Powell has stated that the current economic challenges are not a result of the Fed's monetary policy, which complicates the decision to lower interest rates [12]

Group 1: Job Market Overview - The private-sector payrolls report from ADP for May shows a weak job creation of +37K, significantly below the projected +110K, marking the lowest tally since March 2023 [1][2] - The average job creation over the past four months is only +82K, compared to +197K in the previous four months, indicating a substantial decline in job growth [2] - Goods-producing jobs decreased by -2K, while services added a modest +36K jobs, reflecting ongoing challenges in the labor market [3][4] Group 2: Sector Performance - The Leisure & Hospitality sector gained +38K jobs, followed by Financial Services with +20K and Construction with +6K, while Education & Health Services lost -13K and Professional/Business Services saw a decline of -27K [4] - Medium-sized companies (50-499 employees) led job gains with +49K, while large firms lost -3K and small businesses dropped -13K, highlighting the vulnerability of small-sized companies in the current labor market [5] Group 3: Wage Trends - Job Stayers experienced a +4.5% year-over-year wage increase, while Job Changers saw a +7.0% increase, indicating a generally healthy wage environment despite lower levels compared to previous periods [6] - Wages are stabilizing at robust levels, but there are no strong sectors driving significant hiring, leading to a hesitant job market [7] Group 4: Market Reaction - Following the ADP report, pre-market indexes shifted from positive to negative, with the Dow down -44 points, S&P 500 down -4, and Nasdaq down -20 [8] - Year-to-date performance shows the Dow at -0.7%, S&P at +0.7%, Nasdaq at +2.2%, and Russell 2000 at -6.5%, indicating mixed market sentiment [8]