The S&P 500 has shed 8.1% of its value over two weeks but this morning the benchmark index is trading flat ahead of the nation’s monthly employment report.

“The S&P 500 sagged to a nine-month low yesterday (dropping 0.3% to its lowest since October 2), and it is now down 15.6% since its recent mid-April high,” said economists at BMO Capital Markets.   

Two hours before the opening bell, Dow futures are up 11 points to 9,673 and S&P 500 futures are +3.00 at 1,024.75.

The 2-year Treasury note yield is less than one basis point higher at 0.641% and the benchmark 10-year Treasury note is unchanged at 2.954%.

The August delivery Fannie Mae 4.0 MBS coupon is unchanged at 101-00. The August delivery Fannie Mae 4.5 MBS coupon is unchanged at 103-11.

Key Events Today:

8:30 ― The general media thought last month’s Nonfarm Payrolls / Employment Situation report was bad, but June’s report promises to be much worse. Thanks to the gradual disappearance of Census jobs, plus only moderate inclines in private employment, 110k jobs are expected to vanish in the month, sending the unemployment rate up one-tenth to 9.8%. However, the report should look more positive when Census jobs are discounted from the headline. Indeed, 112k private jobs may have been created in June, compared with just 41k in May.

Economists at Nomura point out that recent labor indicators have been mixed but that a number of sectors have been growing.

“In particular, retail, financial services, professional and technical services, leisure and hospitality, and education and health were all quite soft relative to recent trends,” they wrote. “If a few of these components return to their pre-May trend, employment growth should firm.”

Economists at BMO offer a more pessimistic take with a -200k forecast. 

“This would mark the first decline in jobs since December of last year. However, the decline reflects our expectation that 250,000 census workers will fall off the roles, yielding a private sector job gain of 50,000,” they wrote. “Consensus expectations have been lowered over the past couple of days, reflecting the recent uptrend in initial claims, and the meek 13k increase in the ADP survey, although the latter has underestimated private payrolls by about 80k over the past twelve months.”