Wall Street Stocks Rise to Records Ahead of Crucial Jobs Report

03 Sep 2021 · 3rd Party Analysis

Wall Street Stocks Rise to Records Ahead of Crucial Jobs Report

WRITTEN BY ThorFX

In Summary

  • Stocks tick higher on Thursday, futures float mildly to the upside on Friday
  • Investors expect the jobs report for August to give clues about the Fed’s tapering timeline

A broad move higher lifted all three major US indexes on Thursday ahead of the keenly-watched labor market report which will provide insight into the growth of the US economy and will serve as guidance to help the Federal Reserve decide when to start scaling back the vast monetary support.

The Dow Jones Industrial Average was the best performer among the major stock gauges. The blue-chip 30-stock benchmark added 0.37% and is now less than 0.2% from its all-time record. The S&P500 gained 0.3% to hit a new record close at 4,536.95. The Nasdaq Composite closed up 0.1%, setting a fresh record at 15,331.18.

The upside swing on Thursday was underpinned by better-than-expected jobless claims data. The initial filings for unemployment benefits fell to a new pandemic-era low. Labor Department data showed weekly jobless claims for the week ended Aug. 28 arrived at 340,000, a new low following last week’s 354,000 new applications.

Investors are now looking to today’s jobs report seeing whether the robust economic growth would be sustained in August. The latest nonfarm payrolls and unemployment figures will be published by the Labor Department an hour before the regular trading session kicks in.

Economists are optimistic that the report will show as many as 720,000 people found jobs in August. The number is below the print for July when the economy expanded by a staggering 943,000 new jobs.

The unemployment rate is expected to drop further to 5.2%, compared to 5.4% in July.

European Stock Markets Keep a Steady Outlook

The nonfarm payrolls, widely considered as the most important indicator for the health of the US economy, will be closely monitored by the US central bank which has signaled it is preparing to unwind its monetary support.

A higher-than-expected reading of the jobs report could provide further reassurance the economy has reached a point where it could tolerate a reduction of the ample monthly stimulus from the Fed. A weaker number, on the other hand, could move the goalpost for the start of tapering.

Several concerns have arisen recently that could potentially overshadow the growth of the world’s largest economy. A rise in Delta virus cases and hospitalizations is threatening to hinder consumer spending and business activity, particularly if new lockdown measures are introduced. A continued surge in infections, according to analysts, could prompt the Fed to back off tapering this year.

Futures markets are trading to the upside in pre-market activity on Friday. Futures contracts tied to the Dow Jones, the S&P500 and the Nasdaq Composite are modestly higher by roughly 0.1% each.

In Europe, stock markets kept steady in early Friday deals following a moderate move higher on Thursday. Major European bourses advanced yesterday supported by oil stocks and other economy-sensitive sectors, including industrial goods and services.

Cryptocurrencies were mostly higher on Thursday. Bitcoin gained almost 3% to finish the day at $49,500. Earlier in the session, the largest digital asset pushed to an intraday high of $50,500.

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