Wall Street Week Ahead: Fed fears may be gone but brace for volatility
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Panic selling on fears of an early exit of the U.S. Federal Reserve's stimulus efforts may be over, but the stock market may still face wild intraday swings as investors scramble to position themselves for Friday's payrolls report.
Trading volume is likely to be thin, with a half-day session on Wednesday and markets closed for the Independence Day holiday on Thursday. Both the Labor Department's weekly jobless claims and employment report for June will be released at 8:30 a.m. (1230 GMT).
"Non-farm payrolls generally cause more volatility in the market, but how many times do you see weekly claims and payrolls coming out the same day on a shortened trading week? That will certainly cause a lot of volatility," said Randy Frederick, managing director of trading and derivatives at Charles Schwab & Co Austin, Texas.
In the options market, traders were active in the put weekly options on the S&P 500 (.SPX). These short-term options have a week-long life span and expire on July 5. Put options are generally viewed as bearish bets against the market.
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