Stock futures drift sideways ahead of employment data
Equity futures traded sideways on Wednesday evening as investors waited for more data on the labor market recovery, which will serve as crucial information in determining the way forward for the monetary policies underlying the assets. at risk in the past year.
S&P 500 contracts were little changed at the start of the overnight session. Futures on the Nasdaq also hovered near the flat line, after the index hit an all-time high during Wednesday’s usual trading day.
The indices’ latest march to record highs was fueled by tech stocks, with the Nasdaq extending a string of outperformance from August. This in turn signaled investor concerns about the state of the economic recovery given the spread of the Delta variant, with growth and tech stocks seen as more of a defensive trade amid a resurgence in the market. coronavirus.
For cyclical stocks like energy and travel stocks to keep pace, “We need to see a rollover in the number of COVID cases,” Jeffrey Kleintop, chief global investment strategist at Charles Schwab, told Yahoo Finance. “We have seen this in some states that seem to be leading the way, and some countries as well, but I think we are really dependent on the drop in the number of cases and the renewed confidence in this reopening, and travel. and the service sector continuing to show growth.
New economic data released on Wednesday appeared to justify concerns among market participants that the recovery is slowing. ADP’s closely watched monthly salary report showed only 374,000 private salaries returned in August, significantly missing estimates of 625,000. And Friday’s Labor Department’s civil servant employment report is expected to return. show a deceleration in non-farm payroll gains, these probably increasing by 725,000 for August after a jump of 943,000 in July.
“Private payroll figures have been all over the map during the pandemic,” Mike Loewengart, managing director of investor strategy at E-Trade Financial, wrote on Wednesday. “But with so much pressure on improving the labor market coming from the Fed, it could send a signal that job growth is stagnating. This is probably a good thing for the markets, because it means that the policy easy money continues. “
Namely, many members of the Federal Open Market Committee have indicated that they are inclined to take a close look at labor market data to determine when to start cutting back on their massive asset purchase program during a time of crisis. The August jobs report will be the last monthly government employment data the Fed will receive before its next policy meeting in late September, showing whether the economy has managed to fully recover the jobs lost during the pandemic.
6:01 p.m. ET Wednesday: Stock futures open flat
Here are the main movements at the start of the night session on Wednesday evening:
S&P 500 Futures Contracts (ES = F): +1.25 point (+ 0.03%) to 4,522.5
Dow Futures (YM = F): -2 points (-0.01%) at 35,288.00
Nasdaq Futures (NQ = F): +3.75 points (+ 0.02%) to 15,613.00
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck