Stock market stable ahead of July jobs report; Novavax collapses

The minute of the Friday market

• Global stocks were mixed ahead of the US jobs report, with Asia sliding on concerns over the Delta variant and Europe retaining gains on earnings strength.
• Yields on benchmark 10-year bonds rise to 1.247% ahead of July wages, with investors betting a higher-than-expected reading for new job additions.
• Oil prices are lengthening, setting up the worst week in three months, as traders lower demand forecasts amid the Delta outbreak of infection.
• Fund flows show a defensive tenor, with tech, healthcare and bond portfolios recording the most interest this week, according to BofA data.
• Novavax is collapsing after delaying its request for EUA approval of its vaccine against the developing coronavirus.
• U.S. equity futures suggest a flat open on Wall Street ahead of July employment data at 8:30 a.m. EST.

U.S. equity futures were little changed ahead of Friday’s crucial July jobs report, with investors looking for a reading that could call into question the Federal Reserve’s dovish policy while keeping pace with Delta variant infections in the major economies of the world.

Employers likely created 880,000 new jobs last month, analysts forecast for the July non-farm payroll report, although a weaker-than-expected reading of private sector job growth in the ADP’s payroll group on Wednesday broadened the range of estimated results. .

Benchmark 10-year T-bill yields are rising slightly and trading at 1.247%, which could suggest that investors are preparing for an overall figure closer to 1 million that could potentially trigger a signal to decrease buying of bonds. ‘bonds later this month from Fed Chairman Jerome Powell.

Delta-variant infections, however, add to concerns about growth outside the United States, with 46 cities around the world now under some form of business or travel restriction due to the resurgence.

That reduced gains in emerging market equities, which saw their biggest weekly decline since March, as well as U.S. oil prices, which are down more than 6.3% from the US $ 74 high. last week against a backdrop of slowing demand prospects.

As a result, investor flows are becoming increasingly “COVID defensive,” with data from Bank of America showing increased interest by fund managers in tech and health stocks, as well as a large influx of $ 12.1 in bonds this week, nearly triple. the $ 4.8 billion invested in stocks.

That said, two of the three US benchmarks closed at record highs last night, led by the Nasdaq, and Goldman’s Sachs analyst David Kostin raised his target level for the S&P 500 to 4,700 points. by the end of the year.

Friday’s open, however, is more subdued, with contracts linked to the Dow Jones Industrial Average showing a 4 point opening bell gain and those linked to the S&P 500 valued for a 1 point bump. Futures on the Nasdaq show a decline of 15 points.

Novavax (NVAX) – Get a report Shares were an active pre-market driver, falling 11.6% to $ 208.90 each, after the drugmaker said it would delay the FDA’s request for emergency approval for its vaccine. against the developing coronavirus.

Beyond meat (PARND) – Get a report stocks were also deep in the red, trading down 4.4% to $ 116.50 after the plant-based food group posted a larger-than-expected loss in the second quarter and forecast revenue growth of the current quarter which missed analysts’ estimates.

Robin Hood (HOOD) – Get a report stocks stabilized, rising 3.3% to $ 52.65 each, after yesterday’s 27.6% drop that was linked to the start of options trading and indications of sells by early investors in the group of online trading platforms.

In overseas markets, another strong week for European earnings, along with accelerating vaccinations and the continued commitment of ECB support, kept stocks a touching distance from all-time highs, with the Stoxx 600 remaining stable in the release of the US Jobs Report. at 8:30 a.m. Eastern Time.

Overnight in Asia, however, the MSCI non-Japan regional index is expected to end the worst week in two months in the red, with stocks down 0.33%, Delta infections and the Beijing crackdown weighing on the feeling.

In Japan, where the Olympics will end this weekend, the Nikkei 225 ended the week up 0.33% to 27,820.04 points.