Peloton earnings, ADP jobs report: What to know in markets Wednesday

Heidi Chung

Private employment data and Peloton (PTON) earnings will be in focus Wednesday.

Economists are anticipating that job growth in the U.S. private sector pulled back during the month of January after a strong December. The private sector is expected to have added 160,000 positions last month, down from 202,000 job additions in the previous month, according to Bloomberg-compiled estimates.

Though the ADP report is not always a reliable indicator of what the Bureau of Labor Statistics (BLS) report will illustrate, it does provide a bit of insight into the health of employment in the U.S.

The BLS will release the January jobs report on Friday. Economists polled by Bloomberg are expecting the U.S. economy to have added 160,000 jobs in January, up from the 145,000 positions added in December. The unemployment rate is projected to have held steady at 3.5%.

A Peloton exercise bike. REUTERS/Shannon Stapleton

Meanwhile, fitness company Peloton is set to deliver earnings after the bell. Analysts polled by Bloomberg expect an adjusted loss of 33 cents per share on $423.65 million in revenue.

Cowen analyst John Blackledge expects solid results when Peloton reports fiscal-second quarter results. “Peloton is well positioned to scale via a powerful brand, vertically integrated model & large addressable market. We forecast ramping hardware & subscriptions given geo expansion & rising awareness,” he in a note to clients Jan. 29. “We view Peloton's valuation as attractive at current levels.”

International expansion and new hardware launches could prove to be key catalysts for the stock, according to Bank of America. “Peloton launched its bike in Germany in C4Q'19 which increases the company's TAM by 10 [million], and should contribute to subscriber growth in 2020. Also, while no new hardware launch date has been announced, we continue to believe Peloton's product execution could surprise to the upside and would expect new hardware by next holiday,” the firm said in a note Jan. 28.

Shares of Peloton have surged 17% this year and are well above their IPO price of $29 per share.

Other notable reports scheduled for Wednesday include General Motors (GM), Humana (HUM) and Merck (MRK) before market open.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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