Stock Futures Flat, After Mixed Start of September Trading

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Principal Points

• Futures contracts float near unchanged levels ahead of the regular session on Thursday
• Investors are awaiting Friday’s jobs and unemployment data for new clues about the recovery

US stock futures traded fairly flat and slightly higher in pre-market activity on Thursday after major indexes finished Wednesday’s regular session little changed.

Dow Jones Industrial Average futures slipped in slightly negative territory earlier today but later recovered to flat levels. Nasdaq futures were moderately higher by about 0.1%, while S&P500 futures hovered virtually on the flat line ahead of Thursday’s market action.

The three major stock gauges ended the first trading day of the month with mixed performances. The 30-stock Dow Jones benchmark dipped 48.20 points, or 0.1%, to 35,312.53. The S&P500 was able to notch a winning session yesterday, gaining 1.41 points, or less than 0.1%, to 4,524.09. The Nasdaq Composite climbed 50.15 points, or 0.33%, to hit a record close of 15,309.38.

The consistent advance to higher grounds has been fueled by ample monetary support from the Federal Reserve. The US central bank is now looking to reduce its monthly injections of $120bn in mortgage-backed securities and Treasury securities, a move that inspired the relentless march higher at the onset of the pandemic last year.

Investors Anticipate Tapering Insights

As Federal Reserve Chairman Jerome Powell did not announce any timeline for scaling back the asset purchases during his appearance at the Jackson Hole summit last Friday, investors now expect to hear insights into tapering at Fed’s upcoming meeting.

Federal Reserve officials will gather for their policy meeting on Sept. 21-22 to discuss a potential tapering framework that would give investors enough time to position their portfolios accordingly. In previous speeches, Mr. Powell has stressed the Fed will inform the market way in advance before central bankers decided to dial down the stimulus.

Meanwhile, a largely disappointing economic report was published yesterday from payroll services firm ADP. Private payrolls, jobs created by US companies, rose by 374,000 in August, well below the Dow Jones forecast of 613,000 but still above last month’s 326,000 positions.

Most of the new jobs created in the private sector came from the leisure and hospitality industries, a total of 201,000 new positions. Private education and health services collectively added 59,000 for the month.

The relatively weaker data recently has been attributed to a slowdown in the economic recovery caused by the rapid spread of the Delta virus strain. Lately, the US has been averaging roughly 150,000 new infections per day while the healthcare system has seen increased pressure by a rise in hospitalizations.

Investor focus now turns to Friday’s nonfarm payrolls and unemployment data. The jobs report for August is expected to show US employers added 720,000 new people to the labor market. The projected number is lower than the 943,000 new jobs created in July. The unemployment rate, in the meantime, is estimated to fall to 5.2% from 5.4% a month earlier.

European markets early on Thursday traded relatively flat and slightly to the upside. The Stoxx 600 benchmark index floated right above the flat line, near 474 points.

Bitcoin advanced earlier in the day to a session high of $50,300, a 5% gain, but later momentum eased and the leading token slipped to the current market price of around $50,000 per coin.