Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Payrolls, Tesla's California Leavin', Energy Mayhem - What's Moving Markets

EconomyOct 08, 2021 13:24
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Geoffrey Smith -- It's time for the monthly U.S. labor market report, and half a million Americans are expected to have found work last month. Recent data suggests the risk is for an upward surprise. Stocks are rangebound until the release at 8:30 AM ET (1230 GMT), but bond yields are keeping the pressure on, hitting new highs overnight. Tesla (NASDAQ:TSLA) is leaving California, and the world's energy markets continue to run riot with shortages from Europe to India and China. Here's what you need to know in financial markets on Friday, 8th October.

1. Payrolls to cement expectations of Fed tapering

The U.S. labor market report for September is due, and it will take a major disappointment on the hiring front to shift a consensus that the Federal Reserve will start reducing its bond purchases in November.

Analysts expect the U.S. economy to have added 500,000 nonfarm jobs in the month through mid-September as the country emerged from a soft patch for hiring due to the summer wave of Delta-variant Covid-19. The risk of a surprise appears slightly skewed to the upside, given that ADP’s estimate of private-sector hiring - at 568,000 – was over 100,000 more than the estimates embedded in consensus for today.

Average hourly earnings growth, another key variable, is expected to slow to 0.4% on the month, but to accelerate in annual terms to 4.6%.

2. Crisis? What crisis? (China redux) 

China’s markets and factories reopened in largely positive mood after the extended Golden Week holliday, with few signs that the credit crunch among its real estate sector is affecting sentiment elsewhere.

The People’s Bank of China was able to dial down its daily open market operations without causing any undue volatility. Benchmark equity indices advanced broadly, gaining as much as 2.1%.

However, signs of emergency measures to deal with a looming energy crisis continue to spread across the economy. The government ordered local coal miners to increase production capacity by 72 million tons a year in a development that once again highlights the disparity between Beijing's environmental promises and its near-term economic priorities.

3. Stocks set to open mixed as bond yields touch new highs

U.S. stock markets are poised to open in tight ranges ahead of the payrolls release, but may come under some pressure from the bond market, where yields on both 5-Year and 10-Year benchmark Treasuries continued to rise overnight. The 5-year touched 1.05%, while the 10-year briefly topped 1.60%.

By 6:15 AM ET (1015 GMT), Dow Jones futures were up 27 points, or less than 0.1%, while S&P 500 futures were flat and Nasdaq 100 futures were down by 0.1%. All three indices are still on track for a weekly gain, however, supported by relief at the passing of a bill to suspend the U.S. government debt ceiling until December.

Stocks in focus later will include Life Time Group (NYSE:LTH), after a relatively weak debut on Thursday. The earnings slate is empty as the market prepares for the start of the third-quarter earnings season next week.

4. Tesla joins California exodus

Tesla is to move its headquarters from California to Austin, Texas, CEO Elon Musk said after a shareholder meeting on Thursday.

The company is the latest to relocate away from the country’s traditional tech hub in search of more affordable real estate and shorter commutes. At least, that’s how the company presents the move.

Tesla’s relationship with California has been strained for some time already, Musk chafing in particular at “fascist” social distancing measures imposed by state health authorities at the height of the pandemic’s first wave last year. 

Well, at least the energy supply is more reliable in Tex- oh no, wait...

5. Oil hits new 7-year high as coal and gas shortages continue

U.S. crude futures touched seven-year highs while Brent futures hit three-year highs as global energy markets continued to run riot due to shortages in China, Europe and, increasingly, India.

Power rationing has spread across India as the country’s utilities have been unable, or unwilling, to pay sky-high import prices for thermal coal in a region-wide scramble for fuel.

In China, meanwhile, the shortage of natural gas accentuated by a fire on the new pipeline carrying gas from Russia’s eastern Siberian fields. Although this pipeline has little immediate impact on key demand centers along the eastern and southern seaboards, it comes at a time when any shortfall is acutely felt.

In Europe, meanwhile, Natural Gas Futures continued to tick up in the absence of action to match Russian President Vladimir Putin’s offer of increased supplies earlier in the week.

Payrolls, Tesla's California Leavin', Energy Mayhem - What's Moving Markets

Related Articles

Top 5 Things to Watch in Markets in The Week Ahead
Top 5 Things to Watch in Markets in The Week Ahead By - Jan 23, 2022

By Noreen Burke -- It’s set to be a major week for markets, between the Federal Reserve meeting and an avalanche of big-name earnings. Fed Chair Jerome Powell is...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
mustapha isah
mustapha isah Oct 08, 2021 13:38
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email