US futures and the dollar rise ahead of what traders expect to be a bumper employment report

Stock market
  • US stock futures and the dollar edged up ahead of key March payrolls report.
  • Trading was thinned out due to public holidays in most major markets.
  • Economists expect non-farm payrolls to have risen by the most in six months in March.
  • See more stories on Insider’s business page.

US stock futures and the dollar rose on Friday, ahead of a key report on unemployment that will shed further light on the resilience of the economic recovery, although trading volumes were light on account of the swathe of public holidays around the world.

Futures on the S&P 500, the Dow Jones and the Nasdaq 100 rose between 0.1 and 0.4%, suggesting the benchmark indices could see more record highs when they reopen on Monday.

On Thursday, the S&P 500 scorched past 4,000 points for the first time after data showed a sharp rebound in manufacturing activity in March and following President Joe Biden’s unveiling of an infrastructure spending plan worth $2 trillion.

The Bureau of Labor Statistics will publish its nonfarm payrolls report for March on Friday at 8:30 a.m. ET, providing the most detailed look at how hiring fared throughout last month. The backdrop is promising. March had warmer weather, and a faster rate of vaccinations led some states to partially reopen for the first time since the winter’s dire surge in cases. Coronavirus case counts started to swing higher at the end of the month but largely stayed at lower levels.

Democrats’ $1.9 trillion stimulus plan was also approved early last month and unleashed a wave of consumer demand and aid for small businesses. Sentiment gauges surged to one-year highs, and Americans strapped in for a return to pre-pandemic norms.

Consensus estimates suggest March had the strongest payroll gains in six months. Economists surveyed by Bloomberg said they expected nonfarm payrolls to climb by 660,000, which would be nearly double the 379,000 gain seen in February. The unemployment rate is forecast to dip to 6% from 6.2%.

“We believe a vaccine- and reopening-related rebound in labor force participation is likely to start this month, and this could limit the magnitude of the decline in the jobless rate,” Goldman Sachs led by Jay Hatzuis said in a note.

US 10-year Treasury yields held steady around 1.67%, having hit 1.776% last week, their highest in almost 15 months. Bond yields have risen steadily this year, as prices have fallen, in line with a growing conviction among investors that economic recovery is picking up, which will reignite inflation.

The combination of accelerating growth and inflation makes it less attractive to own government bonds.

The dollar meanwhile traded fairly steadily against a basket of major currencies. The dollar index was last down 0.1% on the day, but still holding close to its highest in five months.

“Friday’s highly-anticipated non-farm payrolls report comes out at a bit of an awkward time; for the first time in six years, the April jobs report falls on the Good Friday holiday, meaning that many major markets will be closed,” CityIndex strategist Matt Weller said in a note on Thursday.

“As a result, readers who are at their desks trading the FX or bond markets may see less liquidity than usual and the post-release move may peter out sooner than usual as traders who are watching the markets look to duck out early to enjoy a long holiday weekend,” Weller said.

Bitcoin nudged at $60,000 for the first time in two weeks, as risk appetite pushed investors into more volatile assets. It was last up 1.2% around $59,540, having gained over 8% in the last week.

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Dow, S&P 500 add to records as weak jobs report boosts stimulus expectations

NYSE Trader Blur
  • US equities gained on Friday morning as the weak jobs report spurred investors hopes for a larger fiscal stimulus package to boost the economy.
  • American businesses shed 140,000 nonfarm payrolls last month, the Bureau of Labor Statistics said Friday. The reading is weaker than consensus economist estimates that foresaw 50,000 job additions, according to Bloomberg data. 
  • “In the face of endless amounts of readily available fiscal and monetary stimulus, the stock market has so far refused to pay attention to the economic data points that matter, like the weak jobs numbers,” James McDonald, Hercules Investments CEO said.
  • Watch major indexes update live here.

US equities gained on Friday morning as the weak jobs report prompted investors to hope for a larger fiscal stimulus package to boost the economy.

The US economy saw a surprise decline in payrolls in December as stricter COVID-19 lockdown measures extended the nation’s unemployment crisis into the new year. American businesses shed 140,000 nonfarm payrolls last month, the Bureau of Labor Statistics said Friday. The reading is weaker than consensus economist estimates that foresaw 50,000 job additions, according to Bloomberg data. 

The country’s unemployment rate stayed steady at 6.7% in December, slightly lower than the median economist estimate of 6.8%.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Friday:

Read more: A growth-fund manager who’s beaten 96% of his peers over the past 5 years shares 6 stocks he sees ‘dominating their space’ for the next 5 to 10 years – including 2 he thinks could grow 100%

“In the face of endless amounts of readily available fiscal and monetary stimulus, the stock market has so far refused to pay attention to the economic data points that matter, like the weak jobs numbers,” James McDonald, Hercules Investments CEO said.

“We expect stock markets to continue to move higher and bond markets to continue to move lower (price down, yields up) as the likelihood of additional fiscal stimulus out of Washington is high and the continued support of the Federal Reserve is likely as well,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance. 

Bitcoin hit a new all-time high of more than $41,000 on Friday morning, staging a rapid recovery despite falling to less than $37,000 overnight. The red-hot cryptocurrency has more than doubled in value over the last month, and risen over 30% in 2021 so far.  

Michael Burry, whose lucrative wager on the US housing bubble’s collapse in 2007 was captured in “The Big Short,” tweeted on Thursday that Tesla stock could implode in a similar fashion. 

“Well, my last Big Short got bigger and bigger and BIGGER too,” the Scion Asset Management boss said as Tesla jumped 8%. “Enjoy it while it lasts.”

Read more: BANK OF AMERICA: Buy these 8 US stocks poised to soar in the first quarter of 2021- and avoid these 2 at all costs

Meanwhile, billionaire investor Chamath Palihapitiya said Tesla’s stock could be worth three times its current valuation, which would make CEO Elon Musk the first trillionaire.

“Don’t sell a share” of Tesla, Palihapitiya told investors in a CNBC interview on Thursday

Gold dipped 2%, to $1,876.51, at intraday lows. The US dollar strengthened against most of its Group-of-10 currency peers, while 10-year Treasury yields climbed further above 1%, where they haven’t been since March.

Oil prices climbed amid a drop in US inventories. West Texas Intermediate crude rose as much as 2%, to $51.83 per barrel. Brent crude, oil’s international benchmark, gained 2.1%, to $55.50 per barrel, at intraday highs.

Read more: Deutsche Bank says buy these 14 beaten-down financial stocks poised for a bullish recovery from 2020’s ‘savage sell-off’ – including one that could rally 30%

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