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Wall Street mixed at midday after initial February jobs data cheers wear off

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12:15pm: Tesla, Peloton among biggest droppers

The Dow was up 81 points, 0.3%, at 31,005 at midday after a brief sojourn in the red. The Nasdaq slumped 149 points, 1.2%, to 12,575, and the S&P 500 ticked down 4 points to 3,764.

“Equity markets were bouncing around but they are now lower,” CMC Markets UK analyst David Madden wrote. “The US 10-year yield has pulled back from the new 1 year high that was set in the wake of the stellar jobs report. There seems to be a little unease in the market as the positive labour update is a double-edged sword. A healthier jobs market bodes well for the recovery but it will also probably bring about inflation pressure – which has a track record of pushing up yields and hurting stocks.”

Friday would be the fourth losing day in a row for the S&P 500 if current trends hold. 

Among the laggards are Tesla Inc (NASDAQ:TSLA), which tumbled more than 9% to $563.27, and Peloton Interactive Inc (NASDAQ:PTON), which slid 5% to $99.45.

10.20am: Proactive North America headlines:

Delta 9 Cannabis Inc (TSE:DN) (OTCQX:VRNDF) (FRA:V5D1) achieves final milestone in services agreement with cultivation partner Fourth Generation Cannabis

Versus Systems Inc (NASDAQ:VS) (CSE:VS) (FRA:BMVB) announces strategic partnership with experiential marketing agency Frias Agency

First Mining Gold Corp (TSE:FF) (OTCQX:FFMGF) (FRA:FMG) files its pre-feasibility study (PFS) for Springpole project in Ontario

DXI Capital Corp (TSE:DXI) (OCTQB:DXIEF) on the hunt for an “impactful tailwind business”; files 2020 financial statement

Predictmedix Inc (CSE:PMED) (OTCQB:PMEDF) completes C$1.1M equity financing to scale up its operations

The Valens Company Inc (TSE:VLNS) (OTCQX:VLNCF) (FRA:7LV) closes C$24.9M deal for edibles manufacturer LYF Food Technologies

9.55am: US stocks start higher

Wall Street benchmarks opened higher on Friday as the latest US jobs data cheered markets and came in better than expected.

The Dow Jones Industrial Average added over 188 points at 31,112. The S&P 500 gained over 18 at 3,787. The tech-laden Nasdaq added around nine points.

America added 379,00 new jobs last month, after rising 166,000 in January. Economists had forecast February payrolls increasing by 182,000 jobs.

The unemployment rate went down to 6.2% as the US economy sprigs back to life amid the vaccination programs.

2.15pm: Labour market stronger

US jobs growth was more than expected in February, putting the labor market recovery back on track amid a decline in new coronavirus (COVID-19) cases, higher vaccination rates and additional economic stimulus from the Biden administration.

Non-farm payrolls jumped by 379,000 last month after rising 166,000 in January; economists had forecast February payrolls increasing by 182,000 jobs. In December, payrolls had fallen for the first time in eight months

Though the unemployment rate fell to 6.2% last month from 6.3% in January, economists believe it continues to be understated by people misclassifying themselves as being “employed but absent from work.”

Federal Reserve chair Jerome Powell offered an optimistic view of the labor market in a speech on Thursday, but cautioned that a return to full employment this year was “highly unlikely.”

Economists believe the labor market will gather steam in the spring and through summer, with vaccinations increasing daily and a boost to hiring expected from President Biden’s $1.9 trillion recovery plan, which is under consideration by the Senate, having been passed by the House of Representatives earlier this week.

Robert Alster, CIO at investment management firm Close Brothers Asset Management commented: “The dramatic increase in nonfarm payroll figures is a sign of progress as Biden completes his sixth week in office. However, it comes after a relatively weak ADP reading for private payroll figures earlier in the week, painting a picture of a labour market of two halves. Wage inflation remained steady – growth looks somewhat unlikely as lower-paid workers re-join the payrolls in the coming months as hospitality and retail sectors open up.”

“Nonetheless, Biden’s pledge for all US adults to have received the vaccine by the end of May, a drop off in coronavirus cases, and tentative relaxation of restrictions all bode well for a continued improvement in the employment numbers. A further boost will be given once the $1.9tn Covid-19 stimulus bill reaches the Resolute desk. With the injection of the vaccine and cash, the President will be hoping he can get the US economy back on the front foot,” he added.

US stock futures rallied following the stronger-than-expected employment report, now pointing to opening gains after earlier signalling fresh falls, although government bond yields also extended their recent surge.

7.20am: Caution ahead of jobs data

US stocks were set for further falls on Friday as investors awaited the February non-farm payrolls report for fresh insights into the health of the US economy.

Futures for the Dow Jones Industrials Average pointed 0.3% lower, while those for the broader S&P 500 shed 0.4% – the S&P 500 is on track for its third week of declines having closed on Thursday at its lowest level since the end of January. Futures for the technology-heavy Nasdaq-100 were the worst-off, however, down 0.6%, suggesting that the sector will continue to lead the retreat.

Stocks have stumbled in recent weeks as a climb in bond yields has called into question whether low-interest rates, which have propelled valuations higher for much of the past year, can continue for much longer as the economy recovers from the coronavirus (COVID-19) pandemic.

The yield on 10-year Treasury notes ticked up again on Friday, to 1.557%, from 1.547% on Thursday, the highest level for the benchmark borrowing cost since February last year. The latest climb in yields came after Federal Reserve Chairman Jerome Powell provided no sign the central bank would seek to stem the rise when he spoke at The Wall Street Journal Jobs Summit on Thursday

February US jobs report, due to be released at 8.30am ET, is expected to show that the economy created 210,000 jobs last month. That would add to signs of a slow improvement in the labor market, after initial weekly jobless claims on Thursday reached their lowest level in three months.

The jobs report may not sway bond yields much, however, because the data are unlikely to affect the progress of President Biden’s new stimulus package through the Senate or the roll-out of the coronavirus vaccine.

Four things to watch on Friday:

  • Oil prices rallied for a second day after OPEC and a Russia-led coalition of oil producers kept most of their production cuts in place, taking the market by surprise, with Brent crude, the benchmark in international energy markets, rose 1.9% to $68.02 a barrel
  • Reddit, the social media platform at the heart of the recent retail stock trading frenzy, said on Friday it had appointed Drew Vollero as its first chief financial officer. Vollero, who served as Snap Inc’s first CFO and was a former executive of Mattel Inc, will lead Reddit’s finance team starting later this month and will report to Jen Wong, the company’s chief operating officer
  • Blockchain payments firm Ripple has not experienced any fallout in its Asia Pacific business after being sued by the US Securities and Exchange Commission (SEC), the company’s chief executive officer said on Friday
  • Texas’ power grid operator Electric Reliability Council of Texas (ERCOT) made a $16 billion pricing error in the week of the winter storm that led to power outages across the state, Potomac Economics, which monitors the state’s power market, said

Story by ProactiveInvestors


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