North American Morning Briefing: Stock Futures Inch Up Ahead of Jobless Claims, Trade Data

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Watch For:

U.S. Trade for July; U.S. Weekly Jobless Claims; U.S. 2Q revised Productivity & Costs; Canada Trade for July.

Opening Call:

Stock futures edged higher Thursday ahead of fresh data on the labor market and the trade balance that could provide insights into the pace of the economic recovery.

Stocks have ground higher this week as investors weighed strong corporate earnings and low interest rates against indicators that growth may be slowing in some parts of the world.

Money managers say they are awaiting the jobs report for August, due Friday, for more cues on when and how the Federal Reserve may taper its bond purchases. The central bank has signaled that the labor market’s recovery is a factor in its monetary policy decisions.

“The confluence of a strong recovery at the same time as very low interest rates and maybe the peak of policy accommodation: if you put those all together, it is a very powerful mix for risky assets,” said Bill Papadakis, macro economist at Lombard Odier. “If you consider the alternatives in which investors could put their money today-with interest rates where they are-equities are often the one option for somewhat better returns.”

The latest data on jobless claims, a proxy for layoffs, is due at 8:30 a.m. ET. Economists estimated first-time filings for unemployment insurance held near pandemic lows in late August. The U.S. trade balance for July will also be released at 8:30 a.m., and likely narrowed as American consumers shifted spending toward in-person services and away from goods.

“We’re in an environment where bad news is sort of good news,” said Olivier Marciot, investment manager at Unigestion. “Every time the situation deteriorates on the macro front, it is making investors hopeful that central bank accommodation will be here for longer.”

Semiconductor and software developer Broadcom and information technology company Hewlett Packard Enterprise are scheduled to post earnings Thursday after markets close.


The dollar’s drop after ADP’s U.S. private payrolls report missed forecasts illustrates the currency’s fragility to labor market data and means big moves could happen following Friday’s official jobs figures, Commerzbank said.

The dollar is sensitive to jobs data as a significant recovery in the labor market is a necessary condition for raising interest rates, Commerzbank currency analyst Ulrich Leuchtmann said.

“And without that the dollar should struggle to appreciate,” he said.

Investors who hold active dollar positions should “fasten their seatbelts” when the Labor Department’s U.S. nonfarm payrolls report is released Friday, he said.

The price of bitcoin rose above $50,000, adding 3.5% from its level at 5 p.m. ET Wednesday.

The euro could extend its rise against the dollar, supported by recent remarks from European Central Bank officials about reducing stimulus and the risk of a weak U.S. nonfarm payrolls report on Friday, ING said.

“With USD that may stay broadly offered into tomorrow’s NFP, EUR/USD may approach the late July 1.1890 highs today,” ING analysts said.

“If payrolls eventually come on the soft side, a break above 1.1900 may well be on the cards.”

ECB member Robert Holzmann said it was time to start debating the tapering of pandemic bond purchases and ECB member Klaas Knot said he expects the bank to start reducing purchases at the September 9 meeting.


The yield on the benchmark 10-year Treasury note ticked down to 1.299% from 1.301% on Wednesday.

Comments by ECB officials pointing to a possible reduction in monetary stimulus “could partly trigger unwelcome reactions on the capital market, ” said NordLB’s analysts Norman Rudschuck and Frederik Kunze.

A bond market selloff in the eurozone earlier this week–also driven by higher-than-expected eurozone inflation–followed comments by ECB Governing Council member Robert Holzmann which contributed to debate around whether to reduce purchases in the Pandemic Emergency Purchase Programme, they said.

“We continue to believe that this discussion is necessary and that a reduction in purchases is likely before the end of 2021,” NordLB’s analysts said.

However, the likelihood that the ECB Bank will keep its pledge for an–albeit unspecific–increased pace of purchases at next week’s meeting “will remain high,” they said.


Oil prices wavered around flat after OPEC+ surprised nobody by sticking with its plans to raise production by 400,000 barrels a day in the coming months.

In the months ahead, the market will be watching Covid infection rates and U.S.-Iran negotiations in the event that a nuclear deal leads to sanctions being lifted on Iranian oil, ING’s Warren Patterson said.

“Overall, the outcome of the meeting was neutral for the market,” he said.

Elsewhere, EIA data revealed a larger-than-expected drop in U.S. crude inventories.



Apple to Allow Media Apps to Link to Own Websites for Payment Options

Apple Inc. said it would allow media apps to create in-app links to sign-up pages on those companies’ websites, allowing the likes of Spotify Technology SA and Netflix Inc. to bypass the iPhone maker’s cut of subscriptions.

Spotify and other technology companies for years have said Apple’s restrictions were unfair and anticompetitive. The Cupertino, Calif., company previously prohibited Spotify and others from directing their users to sign-up options outside the App Store.


Richard Branson’s Virgin Galactic Flight Path Examined by FAA

Aviation regulators are investigating how Virgin Galactic Holdings Inc.’s spacecraft returned to the ground after taking billionaire entrepreneur Richard Branson to the edge of space, a spokesman for the Federal Aviation Administration said.

Virgin Galactic’s Unity space vessel deviated from the flight path it agreed to follow as it came back to the Spaceport America facility in New Mexico on July 11, according to the FAA spokesman. Five other crew members were on board with Mr. Branson, Virgin Galactic’s founder. The mission, called Unity 22, drew widespread attention.


Moderna Says Vaccine Contaminant in Japan Was Stainless Steel, Sees No Safety Issue

TOKYO-The foreign substance detected in some vials of Moderna Inc.’s vaccine in Japan was stainless steel and it isn’t believed to affect the vaccine’s safety or efficacy, Moderna and its Japanese partner said.

Moderna and Takeda Pharmaceutical Co. were reporting the initial results of their investigation after Japan last week recalled three lots of the Moderna vaccine containing a total of 1.63 million doses, citing unspecified contamination.


Intelsat Approved to Put $15 Billion Debt Restructuring to a Vote

The judge presiding over Intelsat SA’s bankruptcy case on Wednesday signed off on allowing the satellite communications company to solicit votes for a restructuring that would cut its $15 billion debt load by more than half.

Judge Keith Phillips of the U.S. Bankruptcy Court in Richmond, Va., overruled objections from a number of parties, including a group of junior convertible bondholders, and approved the disclosure statement describing Intelsat’s debt plan for its creditors.


Purdue Pharma Bankruptcy Plan Approved, Freeing Sacklers From Lawsuits

OxyContin maker Purdue Pharma LP won court approval of a $4.5 billion bankruptcy settlement that shields its owners, members of the Sackler family, from lawsuits accusing them of contributing to the nation’s opioid epidemic in exchange for providing funding to combat the crisis.

Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., said Wednesday he will confirm a restructuring plan that will transform Purdue into a public benefit company and settle civil lawsuits filed by governments and opioid victims against the drugmaker and its owners.


Amazon Seeks to Hire 55,000 for Corporate, Tech Roles Inc. said it is seeking to hire about 55,000 people globally among its corporate and technology ranks during a recruiting event set for Sept. 15, as the e-commerce giant continues a hiring spree begun at start of the Covid-19 pandemic.

The Seattle-based company is aiming to fill roles in cloud-computing unit Amazon Web Services, as well as in divisions such as Amazon Studios, advertising and its broadband satellite Project Kuiper. The open positions include more than 40,000 roles in the U.S. across 220 locations, including in New York City; Bellevue, Wash.; and Arlington, Va., where the company is opening a large corporate office.


Chinese Regulators Tell Ride-Hailing Companies to Fix Compliance Issues by Year-End

Chinese regulators have requested ride-hailing company Didi Global Inc. and 10 other car platforms to strengthen efforts to address compliance issues by the end of the year.

At a meeting Wednesday, authorities led by the Ministry of Transportation criticized corporate attendees, which also included AutoNavi–owned by Alibaba Group Holding Ltd.–and food-delivery leader Meituan, for disrupting market order by using false promotions and making use of unqualified drivers and cars, according to a notice posted on the transport ministry’s social media account Thursday.


Unemployment Claims Trending at Pandemic Lows

New applications for unemployment benefits are likely to hold near pandemic lows, showing the labor market is progressing despite uncertainty caused by the Delta variant of Covid-19.

Economists surveyed by The Wall Street Journal estimate that initial jobless claims, a proxy for layoffs, declined by 8,000 to a seasonally adjusted 345,000 in the week ended Aug. 28. That number would be the lowest level since the pandemic took hold in the U.S. in March 2020.


Why Bitcoin’s Price Got Stuck at $50,000

The late summer lull that overtakes Wall Street is even making bitcoin drowsy.


OPEC Alliance Keeps Gradual Production Increases, Despite U.S. Request

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September 02, 2021 05:50 ET (09:50 GMT)

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