The good old US of A!4 Sep 2020 14:15
Dow futures see tepid rise after stock-market rout, but tech stocks remain under selling pressure ahead of jobs report
What’s driving the market?
After the worst single-day selloff since June, market participants on Friday are waiting for a the most important data point of the week, ahead of an extended U.S. holiday weekend, with markets closed for Labor Day on Monday.
The Labor Department jobs report may show that the U.S. added about 1.2 million new jobs last month, based average estimates of economists surveyed by MarketWatch. That would mark a sizable drop from 1.76 million in July and 4.8 million in June, suggesting the recovery from the pandemic is losing momentum.
The official jobless rate is seen ticking down to 9.8% from 10.2%, but a lower unemployment rate could reflect millions of Americans dropping out of the labor force as they cease looking for work amid the pandemic.
The report on the jobs market has the potential to stoke a renewed round of selling in markets that some have considered overstretched for weeks. However, some market bulls believe that Thursday’s downturn wasn’t indicative of a broader unraveling of the overall upbeat momentum for equities.
Peter Cardillo, chief market economist at Spartan Capital Securities, said “we don’t think yesterdays plunge will turn into meaningful correction.”
“In other words, yesterdays decline is likely to be short lived as rotation maybe unfolding,” he said.
That said, some market player see Thursday’s moves as just the start of a purge of excess on Wall Street after equities surged to records following coronavirus-induced lows in late March.
“Diminishing breadth, the weakest seasonal period of the year (even for election years), over extended rallies in specific mega-cap names, and an approaching presidential election that brings great uncertainty are all likely reasons for yesterday’s plunge in the market,” wrote Jeff deGraaf, founder of Renaissance Macro, in a Friday research note
Sign In
Follow the stocks
