Stocks

Wall Street poised for more record highs, as key jobs report looms

U.S. stock market futures were indicating a higher open on Friday, with Wall Street ready to set fresh record highs ahead of the week’s headline economic data: the jobs report. Meanwhile, equities in Asia and Europe were more mixed amid some weak economic data.

How are stock futures trading?

The Dow
DJIA,
+0.37%

rose 131.29 points on Thursday to finish at 35,443.82, while both the S&P 500
SPX,
+0.28%

and the Nasdaq
COMP,
+0.14%

closed at new records, climbing 0.3% to 4,536.95 and 0.1% to 15,331.18,  respectively.

What’s driving markets?

All eyes are on the U.S. jobs report measuring nonfarm payrolls. This has been the most hotly-anticipated piece of economic data this week.

The employment numbers will give investors their latest chance to estimate how and when the U.S. Federal Reserve will begin slowing, or tapering, its massive program of monthly asset purchases. Fed chair Jerome Powell has signaled that the central bank would use employment as a key indicator while it considers the end of its pandemic-era measures to add liquidity to markets.

“The Federal Reserve has tied monetary policy tightly to the labor market and is yet to see the ‘substantial further progress’ it requires to start tapering bond purchases, let alone raise rates,” said Neil Wilson, an analyst at Markets.com. “Therefore, the pace of job creation will give markets a signal as to the pace and timing of the Fed’s long-expected taper. Expectations are running around 720,000 for today’s print.”

Wednesday’s ADP jobs report, in some ways an opening act for the end-of-week headliner, fell far short of expectations, signaling the economy still has room to run in terms of jobs and indicating potential downside risk in Friday’s data. But analysts have noted that the payroll provider’s report hasn’t always been an accurate preview of the release from the Bureau of Labor Statistics.

Sharing the U.S. economic data spotlight with nonfarm payrolls is the unemployment rate, as well as the Institute for Supply Management’s services index and the final Markit services PMI for August.

Japanese stocks far outperformed their Asian peers after Prime Minister Yoshihide Suga, whose government has come under fire for its handling of the pandemic, said he would resign ahead of national elections this year. 

“Ahead of the all-important U.S. jobs numbers, the big story of the day has been the Nikkei’s 2% surge,” said Russ Mould, an analyst at broker AJ Bell.

“The market’s reaction to his announcement would suggest investors are optimistic that the country will find a stronger leader. Mining, healthcare, real estate and technology stocks all pushed forward on the main Japanese index,” Mould noted.

Chinese equities felt a pinch after weak economic data from the August services purchasing managers index (PMI), which came in at 46.7, below the 52.0 expected and a decline from 54.9 in July. 

How are other assets faring?
  • In Asia, the Shanghai Composite
    SHCOMP,
    -0.43%

    slipped 0.3% and the Hong Kong Hang Seng Index
    HSI,
    -0.72%

    dropped 0.7% into the red, while Tokyo’s Nikkei 225
    NIK,
    +2.05%

    rose 2%

  • In Europe, London’s FTSE 100
    UKX,
    +0.15%

    was 0.2% higher as the pan-European Stoxx 600
    SXXP,
    -0.11%

    fell 0.1%; Paris’ CAC 40
    PX1,
    -0.39%

    declined 0.3% and Frankfurt’s DAX
    DAX,
    +0.10%

    moved 0.1% into the green

  • Oil prices have consolidated gains made in Thursday’s rally, with international benchmark Brent
    BRN00,
    +0.68%

    crude more than 0.2% higher on the day and holding above $73 a barrel

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