Dow Futures Surge On June Jobs Blowout, Coronavirus Vaccine Hopes

The BLS estimated that 4.8 million Americans returned to work last month, as businesses and factories continue to re-open following months of coronavirus shutdowns, adding to further evidence of a broad-based economic recovery.

The Thursday Market Minute

  • Global stocks extend gains, boosted by China stimulus, improving economic data and the prospect for a near-term coronavirus vaccine.
  • Beijing pledges more fiscal stimulus, this time focused on the real estate sector, lifting China benchmarks to two-and-a-half-year highs.
  • The dollar slips to a one-week low against its major global peers as traders move into risk markets, thanks in part to Pfizer's advancements in its coronavirus vaccine research. 
  • Oil prices extend gains after the Energy Department reports a bigger-than-expected 7.2 million decline in domestic crude stocks.
  • U.S. equity futures suggest a firmer open on Wall Street after stronger-than-expected June jobs numbers, as well as solid weekly claims data.

U.S. equity futures bounced higher Thursday, lifting global stocks and pushing the dollar to the lowest level in a week, as investors continue to track data showing a broad-based economic recovery while cheering news of a potential coronavirus vaccine, ahead to today's June jobs report.

U.S. employers added a much-larger-than-expected 4.8 million workers to payrolls last month, data from the Bureau of Labor Statistics estimated Thursday, slashing the headline unemployment rate to 11.1%.

The surge in job creation for the month followed data showing both an upward revision for May additions, to 2.7 million from 2.5 million, and a stronger-than-expected reading of jobless claims for the week of June 27, which fell for the 13th week in a row to 1.427 million.

The gains would still leave more than 16 million Americans out of work, a number that could rise in the coming weeks as bars, restaurants and cafes in various parts of the country delay or reverse plans to re-open in the face of a spike in new coronavirus infections, which hit a record 50,000 yesterday, according to data from Johns Hopkins University.

However, with broad sections of the economy -- from manufacturing activity, which hit a 14-month high last week, to house prices and consumer spending -- showing definitive signs of improvement, and drugmakers such as Pfizer  (PFE) - Get Report and Gilead Sciences  (GILD) - Get Report advancing on studies to produce both a vaccine and a treatment for the deadly disease, investors appear ready to extend risk heading into the start of trading.

Futures contracts tied to the Dow Jones Industrial Average suggesting a 430 point opening bell gain for the 30-stock average, while those linked to the S&P 500, which is down 3.6% for the year, are priced for a 41 point advance. 

Tesla Inc. TSLA extended its lead as the world's most valuable carmaker, after posting stronger-than-expected second quarter delivery figures.

Tesla, which overtook Toyota Motor Co.  (TM) - Get Report as the world's most valuable carmaker by market value yesterday, delivered 90,650 units over the three months ending in June, well ahead of the Street consensus forecast of 72,000

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.2% lower at 96.994 in the risk-on overnight session, while benchmark 10-year U.S. Treasury note yields backed-up to 0.691%.

Spot gold prices drifted 0.1%, easing from Wednesday's 8-year high, to trade at $1,768.51 per ounce, while futures prices for August delivery dipped below the $1,800.00 mark for the first day in four. 

The dollar weakness helped boost global oil prices, which extended gains for a third consecutive session after a much bigger-than-expected 7.2 million barrel slide in domestic crude stocks reported by the Energy Department yesterday. 

WTI contracts for August delivery, the U.S. benchmark, traded 35 cents higher from their Wednesday close in New York and were changing hands at $40.17 per barrel in early European dealing while Brent contracts for August, the global benchmark, were seen 39 cents higher at $40.17 per barrel.

European stocks were also firmly in the green, and rising in parallel with Wall Street futures, as the region-wide Stoxx 600 benchmark gained 1.27% in Frankfurt, paced by a 2% gain for the trade-sensitive DAX performance index and a 1% bump for Britain's energy-heavy FTSE 100. 

Asia stocks were on the march, helped by a surge in China stocks that lifted benchmarks to a two-and-a-half-year high, as Beijing moved to pledge more stimulus cash -- this time focused on the real estate sector -- to ensure the recovery of the world's second-largest economy.

The region-wide MSCI ex-Japan index jumped 1.9% heading into the final hours of trading, while Tokyo's Nikkei 225 edged .11% higher to end the session at  22,145.96 points.