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Market Snapshot: Dow futures rise over 200 points, Nasdaq set to add to record rally ahead of key jobs report

U.S. stock futures on Thursday point to strong gains as investors eagerly await important reports on employment that could shed more light on the state of the domestic economy in the throes of a global viral outbreak. Read More...

U.S. stock futures on Thursday pointed to strong gains as investors eagerly awaited important reports on employment that could shed more light on the state of the domestic economy in the throes of a global viral outbreak.

Independence Day falls on Saturday this year, meaning that U.S. financial markets will be closed on Friday and the bond market will close an hour early at 2 p.m. Eastern Time.

How are benchmarks performing?

Futures for the Dow Jones Industrial Average YM00, +1.01% YMU20, +1.01% were trading 230 points, or 0.9%, higher at 25,805, those for the S&P 500 index ES00, +0.71% ESU20, +0.71% were gaining 19.65 points to reach 3,122.75, a return of 0.6%; while Nasdaq-100 futures NQ00, +0.44% NQU20, +0.44% were climbing 42 points, or 0.4%, at 10,310.75.

For the holiday-shortened week, the Dow is set for a 2.9% gain, the S&P 500 is on pace to return 3.6%, while the Nasdaq Composite Index was aiming for a 4.1% weekly return, as of Wednesday’s close of trade.

What’s driving the market

Market participants have been driving stocks to record heights on signs of improvement in the U.S. economy even as coronavirus cases have been resurgent, and Thursday’s jobs report may provide the clearest picture yet of how the labor market has been responding to viral outbreak.

Economists polled by MarketWatch predict 3.7 million jobs were created or restored in June, with some estimates ranging as high as 8 million. The Wall Street Journal estimates that 2.9 million jobs were created last month, and a survey from Econoday is estimating a gain of 3 million, following May’s payroll gain of 2.51 million, and an unemployment rate of 12.4%, down from 13.3% in May. The unemployment level is expected to hold fairly steady for the month.

A disappointing number could add to fresh worries that the recent resurgence in coronavirus cases is restraining the economic recovery and hampering hopes for a V-shaped, or rapid, economic recovery from closures and lockdowns implemented to curb the spread of the contagion.

The report will reflect hiring as businesses reopened but it won’t necessarily reflect the reversal of restrictions on social distancing by a number of southern and western U.S. states as cases of COVID-19 spiked.

In recent days, Texas required that bars close and Florida imposed new restrictions on those venues. New York City Mayor Bill de Blasio announced that the city would delay the planned reopening of indoor dining at restaurants.

In that way, a report on weekly jobless claims may offer more clarity on the current state of affairs, with 1.4 million people expected to have submitted for unemployment benefits for the week of June 27, compared with 1.480 million last week.

Both labor reports will be released at 8:30 a.m. Eastern.

On Wednesday, Automatic Data Processing Inc.’s private-sector employment report showed the U.S. added 2.37 million jobs in June. More important, ADP raised May’s numbers to reflect that 3.06 million jobs were added rather than the initial report of a loss of 2.76 million jobs.

“The extent of yesterday’s revision, suggests that we can expect further volatility later in the US jobs data in the days and weeks ahead, however it does offer hope that, over the course of the next few months, more furloughed staff will return to work,” wrote Michael Hewson, chief market analyst at CMC Markets UK, in a Thursday research note.

“Expectations for today’s June employment report are for further jobs gains, though the estimates vary widely from just under a million to as high as 8 [million], though the consensus is for just over 3m. In light of the revision to the May ADP number, we should also be mindful of a similarly significant revision here as well,” he said.

The labor reports come as manufacturing activity in the U.S. has shown signs of rebounding. The Institute for Supply Management said its manufacturing index climbed to 52.6% from 43.1% in May and an 11-year low of 41.5% in April.

The nation continues to lead the world, with a case tally of 2.64 million and death toll of 127,681. The U.S. saw some 52,000 new COVID-19 cases Wednesday, according to data compiled by Johns Hopkins University, a new one-day record in the U.S.

Cases have been rising in 35 states in the last 14 days, according to a New York Times tracker, led by California, Texas and Florida.

Meanwhile, in Europe, the unemployment rate in the 19-member eurozone came in at 7.4% in May from 6.6% in April, representing the worst reading since last November, as the bloc grapples with the pandemic.

In other economic reports on Thursday, a reading of factory orders for May is due at 10 a.m.

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