Friday September 3rd

3-09-2021

S&P futures give up gain in volatile trading following disappointing jobs report

U.S. stock index futures gave up early gains on Friday morning after the August jobs report came in short of expectations. Dow futures were down 14 points. S&P 500 futures were flat and Nasdaq 100 futures traded up by less than 0.1%. Nonfarm payrolls increased by 235,000 in August, the Labor Department said Friday. Economists surveyed by Down Jones were expecting 720,000 jobs. The report marks a significant slowdown from July’s revised number of 1.053 million. Forecasts for the report are wide-ranging, from about 300,000 to 1 million. Federal Reserve Chairman Jerome Powell has emphasized the need for more strong jobs data before the central bank would start to unwind its massive bond-buying program, and the disappointing report could change expectations about when the Fed will start its tapering process. “A surprisingly low jobs number this morning clouds the tapering outlook considerably as only 235k jobs were added in August, likely giving the Fed pause and pushing out their plans to announce their bond taper plans,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in a note. “Many people believed that the Fed would announce their taper plans at this month’s FOMC meeting and that is no longer likely.” The central bank will also be looking at whether the report indicates that Covid impacted hiring and activity. The virus variant has been a wild card for the economy, and its impact could be a factor that sways the Fed as it considers the first step away from the easing policies. Jason Furman, who served as the chairman of Council of Economic Advisors under President Barack Obama, said on “Squawk Box” that fears of the delta variant of Covid-19 may have caused a short-term hit to the labor market recovery. “We’re poised to add a lot of jobs in the coming months as people either get over their fears of delta, the delta virus starts to fall or time starts to fix all of this,” Furman said. On Thursday, the S&P 500 and Nasdaq rose to records on the back of better-than-expected jobless claims data. The initial filings for unemployment insurance fell to their lowest levels since March 2020. The S&P 500 climbed 0.3%, hitting its 54th record closing high of 2021. The technology-heavy Nasdaq Composite rose 0.14% to close at an all-time high. The Dow Jones Industrial Average popped 131 points or 0.4%. The S&P 500 and Nasdaq started September on a strong foot. The S&P 500 and the Nasdaq Composite have rise 0.6% and 1.3% so far this week. The Dow is about flat since Monday. Shares in Japan jumped on Friday after Prime Minister Yoshihide Suga said he will not be running in the upcoming leadership election. The Nikkei 225 closed 2.05% higher at 29,128.11 while the Topix index finished the trading day 1.61% higher at 2,015.45. Elsewhere, mainland Chinese stocks closed lower, with the Shanghai composite down 0.43% to 3,581.73 while the Shenzhen component slipped 0.683% to 14,179.86.vHong Kong’s Hang Seng index shed 0.72% to close at 25,901.99. Hong Kong-listed shares of Alibaba fell 3.57% following reports that the firm is set to invest 100 billion yuan (about $15.5 billion) by 2025 for “common prosperity.”South Korea’s Kospi climbed 0.84%. Oil prices were largely steady on Friday as a rebound in global demand was widely expected but a slow recovery for the U.S. Gulf Coast export and refining hub from the hurricane earlier this week weighed on prices. Brent crude futures were up 22 cents, or 0.3%, to $73.25 a barrel at 0911 GMT, while U.S. West Texas Intermediate (WTI) crude futures were down 5 cents at $69.94 a barrel. Both benchmark oil contracts were largely steady for the week. Gold prices rose on Friday after the U.S. August non-farm payrolls report showed a much lower-than-expected jobs gain, which could influence the Federal Reserve’s plans for cutting back its asset purchases. Spot gold was up 0.6% at $1,820.46 per ounce by 8:42 a.m. ET. U.S. gold futures were 1.1% higher at $1,831.80.