Monday April 5th

5-04-2021

Dow futures surge more than 200 points after blowout jobs report

U.S. stock index futures were higher early Monday as investors reacted to a strong bounce in U.S. job growth last month amid accelerating vaccine rollout. Futures on the Dow Jones Industrial Average implied an opening gain of about 230 points. S&P 500 futures and Nasdaq 100 futures also traded in positive territory. The Labor Department reported Friday that nonfarm payrolls increased by 916,000 in March, the highest since August 2020, while the unemployment rate fell to 6%. Economists surveyed by Dow Jones were expecting an increase of 675,000 and a jobless rate of 6%. “This reflects the lifting of restrictions, ramp-up in vaccinations and boost provided by the fiscal stimulus,” said Anu Gaggar, senior global investment analyst at Commonwealth Financial Network. “Faster jobs and wage growth can have an upward pressure on prices and test the Fed’s patience with easy monetary policy.” Wall Street kicked off the month of April with a strong rally. The S&P 500 jumped more than 1% to top the 4,000 threshold for the first time on Thursday, bringing its 2021 gains to 7%. Last week’s strength came after President Joe Biden introduced his multitrillion-dollar infrastructure proposal, which focuses on rebuilding roads, bridges and airports, expanding broadband access and boosting electric vehicle use and updating the country’s electric grid. The plan will be funded partly by a hike in the corporate tax rate to 28%. However, the plan faces opposition among Republicans as the $2 trillion plan includes initiatives that they say extend beyond traditional infrastructure issues. Republican Sen. Roy Blunt of Missouri on Sunday urged the Biden administration to pare back the package to roughly $615 billion and concentrate on physical infrastructure such as roads and airports. Senate Minority Leader Mitch McConnell, R-Ky., said last week that Biden’s plan would not receive Republican support and vowed to oppose the broader Democratic agenda. On the pandemic front, the U.S. reported another daily record of new Covid vaccinations Saturday, pushing the weekly average of new shots per day above 3 million. Shares in India led losses in Asia-Pacific on Monday, with multiple major markets in the region closed for holidays. The Nifty 50 dropped 1.54% to close at 14,637.80 while the BSE Sensex fell 1.74% on the day to 49,159.32 as investors grappled with a recent surge in Covid-19 cases. In Japan, the Nikkei 225 rose 0.79% on the day to 30,089.25 while the Topix index advanced 0.6% to close at 1,983.54. South Korea’s Kospi closed 0.26% higher at 3,120.83. Markets in Australia, mainland China and Hong Kong were closed on Monday for holidays. Oil prices edged down in early Asian trade on Monday after OPEC+ agreed last week to gradually ease some of its production cuts between May and July. Brent crude futures for June fell $1.13, or 1.7%, to $63.73 per barrel, while U.S. West Texas Intermediate crude for May was at $60.38 a barrel, down $1.07, or 1.7%. Gold prices dipped in holiday-thinned trading on Monday as robust U.S. jobs data fueled hopes for a rapid economic recovery and bolstered global equities, denting bullion’s appeal. Spot gold was down 0.3% at $1,724.50 per ounce, as of 0919 GMT. Gold futures eased 0.2% to $1,725.20 per ounce. Most markets in Europe were closed for the Easter holiday.