Dow Futures Extend Gains On Senate Stimulus Vote, Vaccine Rollout: January Jobs Report Disappoints

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The Friday Market Minute

  • Global stocks near record highs, with U.S. markets riding their best weekly gains since November, as vaccine rollouts and economic data continue to improve.
  • The U.S. CDC says 28 million people have received at least one dose of the two approved COVID vaccines, with Johnson & Johnson applying for emergency approval for a third last night.
  • Senate lawmakers follow the House in approving budget procedures that will allow them to pass President Biden’s $1.9 trillion stimulus bill without Republican support. 
  • Oil prices extend the best week in three months, rising to a one-year high on extended OPEC production cuts and bullish bets for near-term energy demand. 
  • U.S. equity futures suggest a firmer open on Wall Street following a muted response to the Labor Department’s January employment report.

U.S. equity futures pushed higher Friday, extending their strongest weekly gains since November, as accelerating vaccine rollouts, improving economic data and solid corporate earnings continue to boost sentiment and lift stock markets around the world.

Futures pared some of their early gains, however, after the Labor Department reported that only 49,000 new jobs were created last month, even as the headline unemployment rate slipped to 6.3%

The Center for Diseases Control said that nearly 28 million Americans have received at least one shot of either the Pfizer  (PFE) – Get Report or Moderna  (MRNA) – Get Report vaccine as of yesterday, a  figure that’s up 5.2 million from the same period last week. With Johnson & Johnson  (JNJ) – Get Report filing for Emergency Use Authorization for its one-dose vaccine with the FDA last night, President Joe Biden’s aim of having 100 million people vaccinated within his first 100 days in the office looks increasingly within reach.

The improving pandemic backdrop has been buttressed by upside surprises from the broader economy, with factory orders rising over the final two months of last year and weekly jobless claims falling to the lowest level in more than two months.

A late-hour vote by the Senate, which allows Democratic lawmakers in the upper chamber to pass Biden’s $1.9 trillion stimulus bill without Republican support, added to the morning’s bullish tone.

Wall Street futures are trading firmly higher following the payroll release, with contracts tied to the Dow Jones Industrial Average priced for a 120 point opening bell gain and those linked to the S&P 500, which is up 4% for the week, indicating a 16 point advance. Nasdaq Composite futures are looking for a 50 point move to the upside.

Peloton Interactive  (PTON) – Get Report shares were a notable early market mover, falling 7.2% to $146.20 each after the connected fitness equipment maker said it would invest around $100 million into improving its logistics and clearing a backlog of orders and deliveries that will hurt near-term profits.

Snap Inc.  (SNAP) – Get Report was also on the move, falling 7.1% to $54.20 each after the messaging app maker said upcoming privacy changes from Apple Inc  (AAPL) – Get Report, which will ask users to grant permission to track their personal data, could hit advertising revenues. 

GameStop Corp  (GME) – Get Report shares were also active, rising nearly 10%, with AMC Entertainment  (AMC) – Get Report the following suit, after online trading app Robinhood removed buying restrictions from all stocks on its platform.

In Europe, regional stocks moved higher as the euro remained under pressure for a resurgent U.S. dollar, although gains remained capped by slower vaccine rollouts and disappointing economic data, particularly in Germany.

The Stoxx 600 was marked 0.4% higher in early trading in Frankfurt, with Britain’s FTSE 100 rising 0.14% in London.

Away from equities, the U.S. dollar index eased from its recent three months highs in overnight trading but was still marked at an elevated 91.413 against a basket of its global peers, which benchmark 10-year Treasury note yields held at 1.157% after hitting a three-week high of 1.162% in late afternoon trading Thursday.

The weaker U.S. dollar gave oil prices a week-ending boost Friday, as well, with Brent on track for one of its best weeks since November — and near to the $60 per barrel mark — amid a combination of improving near-term sentiment for energy demand, falling U.S. inventories and extended OPEC production cuts.

WTI futures for March delivery were marked 61 cents higher at $56.84 per barrel while Brent crude for April, the global benchmark, added 63 cents to trade at $59.47 per barrel.