5 things to know before the stock market opens Friday
Here are the most important news, trends and analysis that investors need to start their trading day:
- Futures rose ahead of jobs report, after the Dow's record close
- Economists expect an April gain of 1 million nonfarm jobs
- Fed warns about potential for 'significant declines' in asset prices
- India reports more than 400,000 daily cases for the third time in a week
- Peloton sees a $165 million hit due to a recall of its treadmills
1. Futures rose ahead of jobs report, after the Dow's record close
U.S. stock futures rose Friday ahead of the before-the-bell release of the government's monthly employment report, which is expected to show a gain of 1 million nonfarm jobs in April. Signs of a recovering labor market in Thursday's Covid pandemic-era-low jobless claims pushed the Dow Jones Industrial Average up nearly 1% to another record close. A similar gain in the S&P 500 carried that index to within 10 points of last month's record close. The Nasdaq rose 0.4%, breaking a four-session losing streak, but still more than 3.5% away from April's record close. Ahead of Friday's open on Wall Street, the tech-heavy Nasdaq was down over 2.3% for the week. The Dow and S&P 500 were up nearly 2% and almost 0.5%, respectively, for the week.
Shares of Pfizer were flat while BioNTech popped 5% in Friday's premarket, after the two companies said they've started the process to file for full approval of their Covid vaccine in the U.S. Full approval would allow the companies to market the two-shot regimen directly to consumers. The FDA granted emergency authorization status to the vaccine in late December.
2. Economists expect an April gain of 1 million nonfarm jobs
The expected growth of 1 million jobs last month comes after 916,000 nonfarm payroll additions in March. The Labor Department is set to issue those April numbers at 8:30 a.m. ET. In a recovering economy on the back of increasing Covid vaccinations, more and more businesses are reopening and looking to hire. The nation's unemployment rate is seen dipping to 5.8% in April.
The April employment report is being widely watched by investors because of the Federal Reserve's pledge to keep its extraordinarily easy monetary policy, including near zero interest rates, in place until the job market heals and inflation starts picking up. However, many traders believe those things are already happening and the Fed might have to rethink its ultra-accommodative stance and make adjustments sooner than it's been forecasting.
3. Fed warns about potential for 'significant declines' in asset prices
Rising asset prices in the stock market and elsewhere are posing increasing threats to the financial system, the Fed warned. In its semiannual Financial Stability Report, released on Thursday, the central bank said there's danger lurking should market sentiment change. "High asset prices in part reflect the continued low level of Treasury yields. However, valuations for some assets are elevated relative to historical norms even when using measures that account for Treasury yields," the report states. "In this setting, asset prices may be vulnerable to significant declines should risk appetite fall."
4. India reports more than 400,000 daily cases for the third time in a week
Daily new Covid cases in India topped 400,000 for the third time this month as the South Asian country struggles to contain a devastating second wave. Health ministry data released Friday showed 414,188 new Covid infections over a 24-hour period, during which at least 3,915 died from the disease. However, reports of overwhelmed crematoriums and cemeteries as well as a growing number of obituaries in newspapers suggest the official figures are undercounting the true death toll. Many localities have tightened Covid mitigation measures even as the Indian government resisted a national lockdown.
5. Peloton sees a $165 million hit due to a recall of its treadmills
Peloton expects its fiscal fourth-quarter sales to take a $165 million hit due to a recall of its treadmills. Shares of Peloton plunged nearly 15% on Wednesday, following the company's reversal in issuing a voluntary recall after one child died and dozens were injured in accidents involving the Tread+ machine. The stock rose 1.4% on Thursday.
Shares jumped nearly 7% in premarket trading, the morning after the fitness equipment company reported a fiscal third-quarter revenue surge of 141% to a better-than-expected $1.26 billion. Demand for its cycles, which represent the majority of its business, remained strong. Peloton's adjusted per-share loss of 3 cents in fiscal Q3 was much smaller than estimates.
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