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Private payrolls — What you need to know in markets on Wednesday

Myles Udland
Markets Reporter

Wednesday will bring investors the first of three straight days of data on the US labor market, which will culminate with Friday’s big jobs report from the BLS.

Expectations are for Wednesday’s private payrolls number from ADP to hit 185,000, down from last month’s blockbuster 298,000 print.

Elsewhere in economic data on Wednesday, we’ll get two readings on the services sector — from Markit economics and the Institute for Supply Management. These readings are expected to show continued growth in the services sector, which accounts for more than 80% of US economic activity.

In markets on Tuesday, the headline action was fairly muted with stocks finishing higher across the board though just fractionally, as the Dow gained 39 points, or 0.2%, the S&P 500 gained 1.3 points, or 0.06%, and the Nasdaq added 3.9 points, or 0.07%.

The big headlines on Tuesday came from JPMorgan (JPM) CEO Jamie Dimon’s latest letter to shareholders, though two notable stories that didn’t quite get the same billing also crossed the tape on Tuesday.

First, Richmond Federal Reserve president Jeffrey Lacker said Tuesday he would resign, effective immediately. As Reuters reported, Lacker stepped down “after admitting a conversation he had with a Wall Street analyst in 2012 may have disclosed confidential information about Fed policy options.”

“The 2012 leak had triggered a criminal investigation and came as the Federal Reserve was laying the groundwork for a massive bond buying package that it rolled out later in the year,” Reuters added.

“The information was disclosed by Medley Global Advisors one day ahead of the publication of the central bank’s own minutes from its September meeting.”

Business Insider columnist Pedro da Costa wrote Tuesday that this leak, which he pressed Fed Chair Janet Yellen on back in 2015, still has left a number of questions unanswered. Namely, who knew what when, and why did it take years for Lacker’s involvement to surface? The questions will certainly continue.

Elsewhere, Business Insider’s Matt Turner and Rachael Levy reported Tuesday that analysts at Morgan Stanley (MS) made a $5 billion error in its forecasted earnings for Snap (SNAP) in its initial research report on the company. Morgan Stanley, which led the camera company’s public debut, put a $28 price target on the stock. As of Tuesday’s close, Snap shares were trading near $22.

Dimon writes

JPMorgan CEO Jamie Dimon’s latest missive to shareholders was, on balance, perhaps what you expected.

That letter asserted that regulation and taxes are holding back American business, but overall there are a number of reasons to be bullish on the US economy.

But the content of Dimon’s letter is perhaps less important than what this letter is beginning to stand for. Namely, that this is the next big CEO letter to shareholders.

Each year, investors eagerly await the publication of Berkshire Hathaway (BRK-A, BRK-B) CEO Warren Buffett’s letter to shareholders. Buffett’s writing on markets have been collected into books and, over the years, have more or less given students and investors the equivalent of years worth of business school lessons.

On this count, Dimon’s letters — while detailed and informative — fall a bit short.

But during a town hall discussion hosted by Yahoo Finance editor-in-chief Andy Serwer, Dimon said that Buffett’s goal to write a letter explaining the goings-on at Berkshire to his very smart, but not business-inclined, sister was the motivating principle behind his draft.

And in this, Dimon is making clear that as the chief executive of one of the world’s largest and most recognizable financial institutions, he is striving as much for a mainstream audience as an expert investing one.

No one will be the next Warren Buffett, an avatar of a period in American capitalism when capital markets were ascendant and a shut-in from Omaha, Nebraska could be the market’s most formidable player. But perhaps Dimon, with his brash New York attitude and desire to, in his words, speak his mind “to anyone, anytime, anywhere,” will come to represent the current era of the US economy.

This is a time when bankers are on the defensive, when technology is ascendent, and when the president boasts about his ability to make deals. It’s a time when a letter to shareholders gives not a collection of life and business lessons, but an overview of everything good and everything bad about the current iteration of the American experiment.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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