Friday morning is expected to see a positive start on Wall Street as traders await the all-important non-farm payroll figures for November.
The Dow Jones Industrial Average and Nasdaq Composite are expected to extend gains when they get going, with the S&P 500 seen making up for its small reverse from a day earlier.
The timing of today’s US jobs report today is very interesting, says market analyst Craig Erlam at Oanda.
“A bad report could be what the doctor ordered, piling additional pressure on lawmakers to get a deal done, even an imperfect one that sees the country through the holiday period and to the end of January, at least.”
He said a strong jobs report may not be well received if it’s used as a tool to negotiate down any relief effort by senate majority leader Mitch McConnell, who made similar comments last month.
“The concern could be that a seemingly strong report could remove some of the urgency needed to get this over the line before some support measures expire at the end of the year,” Erlam says.
But it’s been a “decent” week so far in the markets, says Erlam, with plenty of enthusiasm around, whether that be from Covid vaccine results or the stimulus talks on Capitol Hill.
“For the first time this year, things are looking up and that optimism can be felt throughout these markets,” Erlam said.
“They are running low on fuel a little at this point though, with so much of that positivity now priced in.
“While talks getting underway over another relief package in the US is promising, it still feels there’s a significant divide that needs to be overcome. The urgency to do so and pass something alongside a spending bill – needed to avoid a partial shutdown on 11 December – is also encouraging.”
Four things to watch for on Friday:
- While the non-farm payrolls will be the big macro news, there may also be interest in the US trade balance for October, which is expected to see the nation’s trade deficit widen slightly to US$64.8bn from US$63.9bn in September
- Also in focus will be the US unemployment rate for November, which is forecast to edge lower to 6.8% from 6.9% in October
- The corporate results calendar is looking a little sparse, however, some investors may be interested in third quarter numbers from retailer Big Lots Inc (NYSE:BIG) and industrial distribution firm HD Supply Holdings Inc (NASDAQ:HDS)
- Share price reaction may also be eyed from Moderna Inc (NASDAQ:MRNA) after the biotech said late on Thursday that its COVID-19 vaccine candidate could confer long-term immunity from the virus
Story by ProactiveInvestors
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