Thursday August 5th

5-08-2021

Stock futures rebound as investors await more jobs data

U.S. stock index futures were mildly higher Thursday morning as Wall Street looked to improve upon a mixed week. Dow futures rose 69 points, or 0.2%. S&P 500 futures and Nasdaq 100 futures also added about 0.2%. The moves in the futures markets came after a mostly lower regular session on Wednesday. The Dow Jones Industrial Average shed 323.73 points, or 0.9%, and closed near its session low at 34,792.67. The S&P 500 slipped about 0.5% to finish at 4,402.66, while the Nasdaq Composite ticked up 0.1% to 14,780.53. Weekly initial jobless claims came in at 385,000 on Thursday, in-line with expectations. Recent earnings and economic data have been strong overall, but some economists worry economic growth and employment gains will taper from here. The jobless claims data was the last reading before the key July jobs report, which will be released on Friday morning. There is a wide range of estimates from economists and what the report will show, and some metrics for employment gains have disappointed despite a high level of reported job openings. “Many factors are likely driving worker shortages; concerns about catching the virus, childcare responsibilities, skills mismatches, and generous unemployment insurance benefits,” PNC Senior Economist Abbey Omodunbi said in an email. In the second half of the year, “more competition for workers, particularly in the leisure and hospitality sector, will support acceleration in wage growth, boosting household incomes and consumer spending.” The results of an ADP private payroll survey released Wednesday showed a gain of 330,000 jobs for July, well short of the consensus estimate of 653,000. The Labor Department’s official jobs report, which typically has more impact on investors, will be released on Friday. Economists expect the report will show the U.S. added 845,000 in non-farm payrolls in July, about even with the previous month, according to Dow Jones estimates. The 10-year Treasury yield was trading down slightly near 1.17% on Thursday. The yield briefly dipping below 1.13% on Wednesday before bouncing back in late morning trading. Shares of Roku and Uber dropped after each issued quarterly earnings results. Etsy fell 12% in premarket trading after the company gave guidance for the current quarter that indicated the pandemic-fueled commerce boom may be coming to an end. Uber was off by 3% in premarket trading. However, earnings season has been strong overall. Goldman Sachs raised its year-end target for the S&P 500 to 4,700, representing 7% upside, in part due to an improving earnings outlook going. During regular trading Wednesday, shares of Robinhood surged 50%, continuing a volatile jump after last week’s soft initial public offering. Semiconductor stocks were another bright spot, with Nvidia and Advanced Micro Devices rising. Shares in Asia-Pacific were mixed on Thursday. Investors also monitored Hong Kong-listed shares of firms related to the Chinese video game sector after China’s state media once again took aim at the industry. By Thursday’s market close in Hong Kong, shares of Tencent in the city slipped 3.9% while Netease dropped 3.76%. The Hang Seng Tech index declined 2.1% to 6,715.33. Hong Kong’s broader Hang Seng index closed 0.84% lower at 26,204.69. The Shanghai composite in mainland China fell 0.31% to close at 3,466.55 while the Shenzhen component shed 0.786% on the day to about 14,872.23. Japan’s Nikkei 225 gained 0.52% to close at 27,728.12 while the Topix index advanced 0.39% to finish the trading day at 1,928.98. South Korea’s Kospi closed 0.13% lower at 3,276.13. Oil prices edged higher on Thursday, supported by tensions in the Middle East, but failed to regain most of the previous day’s losses after a surprise build in crude stockpiles in the United States, the world’s top oil consumer. Brent crude oil futures rose by 14 cents, or 0.2%, to $70.52 a barrel by 0132 GMT, while U.S. West Texas Intermediate (WTI) crude futures increased by 18 cents, or 0.3%, to $68.33 a barrel. Both benchmarks fell by more than $2 a barrel on Wednesday. Gold prices were on the back foot on Thursday as an uptick in the dollar following hawkish comments from a key Federal Reserve official raised early tapering bets and dented demand for the safe-haven metal. Spot gold fell 0.1% to $1,809.10 per ounce by 0853 GMT, while U.S. gold futures were down 0.1% at $1,812.10.