12:25pm: Traders await $2T Biden infrastructure proposal
The Dow has been volatile, settling at 11 points above the flatline at 33,078 in the early afternoon. The Nasdaq Composite jumped 240 points, 1.8%, to 13,286, and the S&P 500 added 29 points, 0.7%, to 3,988.
“Softer bond yields have allowed gold to rally as well as tech stocks, as the yellow metal defends the $1,685 area once again,” IG Chief Market Analyst Chris Beauchamp wrote. “If the yield trade begins to cool then we could see some respite for gold after a very dismal quarter, something that would help silver and the mining sector as well, but such hopes remain fairly muted at present thanks to the widespread expectations of a continued economic recovery that will continue to bolster yields.”
On Wednesday night, President Biden is expected to announce an infrastructure spending package of more than $2 trillion, which would be utilized over eight years, according to media reports. The proposal includes $621 billion for transportation infrastructure and $400 billion direct to care for elderly and disabled people. It would also raise the corporate tax rate to 28%.
10am: Proactive North America headlines:
African Gold Group Inc (CVE:AGG) (OTCMKTS:AGGFF) (FRA:3A61) hails more positive metallurgy results; names Paul Bozoki as new finance chief
Benchmark Metals Inc (CVE:BNCH) (OTCQB:CYRTF) (FRA:87CA) says latest drill assays show potential to expand the AGB zone at Lawyers to the south and at depth
Marble Financial Inc (CSE:MRBL) (OTC:MRBLF) (FRA:2V0) inks referral deal with Loans Canada to bring consumers to its MyMarble financial wellness platform
Willow Biosciences Inc (TSE:WLLW) (OTCQX:CANSF) (FRA:3D7) completes first commercial-scale fermentation run of ultra-pure CBG
Melkior Resources Inc (CVE:MKR) (OTCMKTS:MKRIF) (FRA:MEK1) unveils high grade intercepts from Kirkland Lake drilling at Carscallen asset in Ontario
9:40am: Wall Street starts in the green
The main indices on Wall Street managed to start Wednesday’s session on a positive footing after ADP data revealed a jump in new jobs in March from the US private sector.
Shortly after the opening bell, the Dow Jones Industrial Average was up 0.29% at 33,163 while the S&P 500 climbed 0.36% to 3,972 and the Nasdaq rose 0.67% to 13,129.
The ADP data showed that private employers took on 517,000 US workers in March, a sharp increase from February’s figure of 176,000 but below forecasts of 550,000.
Nela Richardson, ADP’s chief economist, said: “We saw marked improvement in March’s labor market data, reporting the strongest gain since September 2020,
“Job growth in the service sector significantly outpaced its recent monthly average, led with notable increase by the leisure and hospitality industry. This sector has the most opportunity to improve as the economy continues to gradually reopen and the vaccine is made more widely available. We are continuing to keep a close watch on the hardest hit sectors but the groundwork is being laid for a further boost in the monthly pace of hiring in the months ahead.”
7:45am: Wall Street heads for mixed open
There looks to be a mixed session in prospect for Wall Street on Wednesday as investors await the latest ADP jobs data.
The Dow Jones Industrial Average is expected to open around 47 points or 0.1% lower at 33,019 but the S&P 500 and Nasdaq Composite are both looking at marginal increases.
Investors will be looking out to the ADP figures ahead of the non-farm payroll numbers in a couple of days’ time.
Joshua Mahony, senior market analyst at IG said: “Jobs data out of ADP provides us with clues as to the direction of travel for Friday’s non-farm release, with traders hoping to see some initial benefit from the $1.9 trillion stimulus package agreed earlier in the month.”
The forecasts are for the ADP report to show a gain of around 550,000 jobs in March, after a rise of 117,000 last month.
Michael Hewson at CMC Markets UK said: “The US ADP employment report, due out later could also offer up further evidence of a booming US economy if the numbers in any way reflect the huge surge we saw in US consumer confidence in March.
“This afternoon’s numbers could well be an important leading indicator on Friday’s upcoming non-farm payrolls report, where we’ve seen a number of forecasters suggest we might see up to 900,000 new jobs added. While this may be on the optimistic side of forecasts any sort of bumper number will test the Fed’s narrative that a booming jobs market isn’t an inflation risk.”
Signs of inflationary pressures are likely to push up US bond yields again and unsettle the stock market.
Also coming up is President Biden’s infrastructure proposals worth up to $4trn, which should give another lift to the US economy but may also stoke those inflation fears further.
Four things to watch for on Wednesday:
- Earnings reports for the last day of March will include numbers from computer data storage firm Micron Technology Inc (NASDAQ:MU), pharmacy chain Walgreens Boots Alliance Inc (NASDAQ:WBA) and building management group Acuity Brands Inc (NYSE:AYI)
- Meanwhile, shares in Pfizer Inc (NYSE:PFE) will be in focus after it said a trial of its COVID-19 vaccine, developed with BioNTech, showed it was 100% effective in adolescents
- Amazon Inc (NASDAQ:AMZN) could also draw attention after Deliveroo Holdings PLC (LON:ROO), which is backed by the ecommerce giant, saw its shares tank on its trading debut on the London Stock Exchange
- On the macro front, aside from the ADP data investors may also be keeping an eye on the Chicago PMI and home sales figures
Story by ProactiveInvestors
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