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Market Analysis 08 Oct 2021

Market Analysis 08 Oct 2021

General Market

U.S. stocks are seen opening marginally higher Friday, with investors displaying caution ahead of the release of the widely-watched monthly employment report.

At 7:05 AM ET (1105 GMT), the Dow Futures contract was up 30 points, or 0.1%, S&P 500 Futures traded 3 points, or 0.1%, higher, while Nasdaq 100 Futures climbed 7 points, or 0.1%.

The major indices closed higher Thursday after the U.S. Senate agreed to raise the debt limit on the federal government by $480 billion until December, thwarting a possible default and the associated financial crisis and likely recession.

The blue chip Dow Jones Industrial Average rose over 300 points, or 1%, the broad-based S&P 500 advanced 0.8% and the tech-heavy Nasdaq Composite climbed 1.1%. All three indices are on course to finish the week higher.

The main focus Friday will be the official job report for September, due at 8:30 AM ET (1230 GMT), with investors using the strength of the labor market as a barometer for the state of the economic recovery, and thus a guide on whether the Federal Reserve feels comfortable in starting the tapering of its bond-buying program this year, as expected.

Nonfarm payrolls are expected to rise 500,000 in September, a jump from after the August disappointment of only 235,000 positions, which was the worst total since January. Average hourly earnings are likely to have risen 0.4% month-on-month, compared with the previous month’s 0.6% rise, while the unemployment rate is set to fall to 5.1% from 5.2%.

In corporate news, Tesla (NASDAQ:TSLA) will be in the spotlight Friday after Elon Musk, the electric vehicle manufacturer’s chief executive, confirmed that it will move its company headquarters to Texas from California.

The third quarter earnings season kicks off in earnest next week, with some of the world’s biggest banks up first. Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), Citigroup (NYSE:C) and JPMorgan Chase (NYSE:JPM) posted a combined $33 billion in profits in the second quarter as the economy rebounded, but that momentum likely slowed in the third quarter.

Crude prices rose Friday, heading for a seventh weekly gain, as the U.S. Energy Department said it has no plans currently to release oil from the country’s strategic reserves.

The potential for the U.S. adding supply to the market had been floated Thursday as a method of curbing oil prices. These have climbed to multi-year highs on the back of signs of improved fuel demand as economic activity rebounds, OPEC producers only gradually increasing output as well as fears that a cold winter will further strain gas supplies.

By 7:05 AM ET, U.S. crude futures traded 0.8% higher at $78.92 a barrel, while the Brent contract rose 0.7% to $82.55. Earlier in the week, WTI touched a near seven-year high while Brent hit a three-year high.

Additionally, gold futures rose 0.2% to $1,761.95/oz, while EUR/USD traded 0.1% higher at 1.1560.

 

Written by Editor

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