Wednesday September 1st


Stock futures rise to kick off September trading, Dow futures gain 100 points

U.S. stock index futures were higher in early morning trading on Wednesday after the S&P 500 notched a seven-month win streak in August. Dow Jones Industrial Average futures rose 115 points, or 0.3%. S&P 500 futures gained 0.4% and Nasdaq 100 futures added 0.3%. The major averages all finished higher for the month of August. The S&P 500 rose 2.9% for the month, posting its best winning streak since 2017. The Nasdaq Composite gained about 4% for its third positive month and while the Dow lagged, it still added 1.2%. Cyclical stocks tied to the reopening of the economy were gaining in premarket trading Wednesday. Casino shares were higher, led by Las Vegas Sands. Exxon Mobil led a gain in energy shares. Bank shares were rising led by Citigroup and Bank of America up by about 1% apiece in the premarket. The financials sector led the market higher in August with a gain of 5%. “We maintain a risk-on stance and position in stocks that should benefit from strong economic growth and reopening,” wrote UBS wealth strategists in a Wednesday note. Solar stock Sunrun gained 2% in premarket trading after JPMorgan predicted a comeback that would take the shares 90% higher. Zoom Video shares rebounded in premarket trading following a 16% plunge Tuesday after Cathie Wood revealed she bought nearly 200,000 shares on the dip. On the data front, U.S. companies created far fewer jobs than expected in August with private payrolls rising just 374,000, according to a report from payroll services firm ADP. That is well below the Dow Jones estimate of 600,000. The report is a precursor to the official August U.S. non-farm payrolls data, which will be released Friday. Economists polled by Dow Jones expect 720,000 jobs were created in August and the unemployment rate fell to 5.2%. Despite internal rotations from reopening stocks to tech and back again, the S&P 500 has had a pretty smooth ride so far in 2021, up more than 20% without even a 5% pullback. The benchmark has closed above its 200-day moving average, a measure of the long-term trend, for 296 days in a row. So some strategists are on the lookout for a correction in September given that stocks haven’t had a significant one since last October, combined with the highly anticipated meeting of the Federal Reserve Bank in September and the continued worry about the delta Covid variant. “Although this bull market has laughed at nearly all the worry signs in 2021, let’s not forget that September is historically the worst month of the year for stocks,” said LPL Financial Chief Market Strategist Ryan Detrick. “Even last year, in the face of a huge rally off the March 2020 lows, we saw a nearly 10% correction in the middle of September.” He added any weakness could be short-term and contained in the 5% to 8% range. “This bull market is alive and well and we would view any potential weakness as an opportunity,” he said. Shares in Asia-Pacific were mixed on Wednesday, as a private survey showed shrinking Chinese factory activity in August. Mainland Chinese stocks closed mixed as the Shanghai composite advanced 0.65% to 3,567.10 while the Shenzhen component dipped 0.1% to 14,314.09. Hong Kong’s Hang Seng index edged 0.45% higher, as of its final hour of trading. Elsewhere in Japan, the Nikkei 225 jumped 1.29% to close at 28,451.02 while the Topix index advanced 1.02% to finish the trading day at 1,980.79. Meanwhile, South Korea’s Kospi climbed 0.24% to close at 3,207.02. Oil prices rose on Wednesday before an OPEC+ meeting at which the producer club is expected to stick to a plan to add 400,000 barrels per day (bpd) each month to the end of December. Brent crude for November delivery gained 18 cents, or 0.3%, to touch $71.81 a barrel. U.S. West Texas Intermediate (WTI) crude for October was up 17 cents, or 0.3%, at $68.67. Gold prices were little changed on Wednesday as investors awaited a key U.S. jobs report for clues on when the Federal Reserve might start reducing its pandemic-era stimulus measures. Spot gold was steady at $1,814.01 per ounce by 0343 GMT, while U.S. gold futures eased 0.1% to $1,816.00. The dollar index clawed 0.1% higher, but hovered closer to a more than three-week low hit on Tuesday.