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The Thursday Market Minute

  • Global stocks edge cautiously higher ahead of Friday’s jobs report, with bond market yields easing on softer-than-expected factory output data and COVID infection concerns.
  • The U.S. dollar index holds at a three-week low against its global peers after soft ADP jobs data suggests slower employment growth in August. 
  • Lower bond yields lift tech stocks, with the Nasdaq set to extend its record run at the start of trading Thursday.
  • Oil prices rise after a bigger-than-expected fall in domestic U.S. crude stocks and confidence that OPEC’s production increases will be absorbed by rising demand.
  • U.S. equity futures suggest a modestly firmer ahead of weekly jobless claim and trade data at 8:30 am Eastern time.

U.S. equity futures edged higher Thursday, setting up another record high for the tech-focused Nasdaq, as investors continue to add risk to global portfolios ahead of Friday’s crucial jobs report. 

The MSCI World index printed a fresh record high Thursday, as well, as stocks in Asia and Europe booked modest gains even as data continues to suggest factory activity is easing amid COVID-lead disruptions to global supply chains.

Bond markets, however, remained cautious, with benchmark 10-year note yields easing to 1.287%, suggesting some investors are still tracking the impact of Delta-variant infections on global and domestic growth, which could in turn slow the Federal Reserve’s plans to tapering the pace of its $120 billion in monthly bond purchases. 

Wednesday’s softer-than-expected reading of private sector job gains underscored that concern, with payroll processing group ADP reporting a net new 374,000 positions were added last month as supply chains tightened and business restrictions accelerated with the rise in COVID infections.

Wall Street futures, however, suggest another modestly firmer open to start the trading day ahead of weekly jobless claims data at 8:30 am Eastern time, with contracts tied to the Dow Jones Industrial Averaging indicating a 50 point advance.

The S&P 500, which is up 20.5% for the year, is priced for an 8 point bump while Nasdaq Composite futures are looking at another intra-day record high with futures indicating a 35 point opening bell gain.

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Pfizer  (PFE) – Get Pfizer Inc. Report shares were active in pre-market trading, rising 0.52% to $46.28 each, after the drugmaker said it would being a phase 3 trial of its investigational vaccine designed to prevent respiratory syncytial virus, or RSV, in adults aged 60 years and over.

Tesla  (TSLA) – Get Tesla Inc Report shares were also on the move, falling 0.3%, amid reports that the global shortage in semiconductors forced four days of closures at the carmaker’s Shanghai-based factory, potentially delaying the production of Model Y SUVs.

Oil prices were back on the rise Thursday, thanks in part to the U.S. dollar trading at a three-week low against a basket of its global peers, as investors reacted to both OPEC’s plans to boost production over the coming months and data from the Energy Department showing a much bigger-than-expected 7.2 million barrel decline in domestic crude stocks over the week ending July 29.

WTI crude futures for October delivery were marked 39 cents higher at $68.98 per barrel while Brent crude futures for November jumped 48 cents to $72.07 per barrel.

In Overseas markets, European stocks moved closer to last month’s all-time highs as the Stoxx 600 gained 0.2% in the opening hours of trading in Frankfurt, paced by rebounds in travel stocks and news of the biggest changes to the DAX performance index in three decades.

Deutsche Boerse, the exchange operator, will expand the DAX to 40 stocks from 30, starting on September 20, with a slate of tech and growth stocks potentially identified as possible new additions to the Germany company benchmark.

Overnight in Asia, Japan’s Nikkei 225 rose 0.33% to close at 28,543.51 points while the region-wide MSCI ex-Japan index edged 0.07% higher into the final hour of trading.