S&P 500 Futures Gain Before Jobs; Treasuries Dip: Markets Wrap

U.S. stocks futures were mixed after yesterday’s deepest equity selloff since June, with investors sitting tight before the August jobs report.

Apple Inc., Tesla Inc. and Facebook Inc. shares were steady in pre-market trading, suggesting that momentum from the rout has largely dissipated. S&P 500 contracts gained 0.6% ahead of the U.S. open, while Nasdaq 100 Index futures dipped 0.4%.

In other markets, there was no clear reaction to the tech-driven plunge in U.S. markets on Thursday. European bank stocks rallied after news that Spain’s CaixaBank SA and Bankia SA are exploring a 14 billion-euro ($16.6 billion) merger. The dollar index ticked lower and Treasury yields rose. Gold climbed to $1,940 an ounce.

The jobs report is expected to show that the labor market continued to improve in August and economists project that the unemployment rate dropped below 10% for the first time since March. That could add support to a case that the economy is improving, even as the pandemic rages on.

Still, all eyes will be on tech companies. While the industry is generating blockbuster profits, there’s also been an explosion of speculative options among retail investors. For some investors, that’s clear evidence that tech stocks have become overheated.

“This is unlikely to be a repeat of the tech wreck of the late 1990s, given how much the market and sector have changed,” said JPMorgan Asset Management strategist Kerry Craig. While valuations are elevated, “we are also mindful of the earnings and revenue potential in the coming years from areas like cloud computing and artificial intelligence.”

In other assets, emerging-market stocks fell for a third day. Asian shares dropped, with Australia’s benchmark recording the biggest decline since May.

Here are some key events coming up:

  • U.S. jobs report Friday is forecast to show payrolls continued to rebound in August from virus lows.

Here are the main market moves:

Stocks

  • Futures on the S&P 500 Index climbed 0.3% as of 6:50 a.m. New York time.
  • The Stoxx Europe 600 Index increased 0.5%.
  • The MSCI Asia Pacific Index sank 1.2%.
  • The MSCI Emerging Market Index declined 0.7%.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%.
  • The euro was little changed at $1.1847.
  • The British pound was little changed at $1.3282.
  • The Japanese yen was little changed at 106.15 per dollar.
  • The offshore yuan strengthened 0.1% to 6.8419 per dollar.

Bonds

  • The yield on 10-year Treasuries jumped one basis point to 0.65%.
  • The yield on two-year Treasuries increased less than one basis point to 0.13%.
  • Germany’s 10-year yield gained less than one basis point to -0.48%.
  • Britain’s 10-year yield climbed one basis point to 0.247%.
  • Japan’s 10-year yield climbed less than one basis point to 0.041%.

Commodities

  • West Texas Intermediate crude surged 1.1% to $41.74 a barrel.
  • Brent crude jumped 0.9% to $44.38 a barrel.
  • Gold strengthened 0.4% to $1,939.11 an ounce.

— With assistance by Adam Haigh

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