By Geoffrey Smith
Investing.com -- The Senate adopts a bill speeding the passage of President Joe Biden’s $1.9 trillion stimulus package. Nonfarm payrolls are set to top the prior consensus for a gain of 50,000 in January, Ford and Peloton struggle with production bottlenecks, Kuaishou Technology completes the largest tech IPO since Uber and oil closes in on $60 a barrel. Here’s what you need to know in financial markets on Friday, February 5th.
1. Senate adopts bill fast-tracking stimulus
The U.S. Senate adopted a bill that allows President Joe Biden’s $1.9 trillion stimulus plan to be passed without Republican support, something that will speed the package’s progress into law.
The Senate finished voting on a series of non-binding amendments just after 5:30 AM ET, after a marathon session that saw spirited opposition from Republican Senators to various provisions of the bill. Vice-President Kamala Harris used her casting vote in advance, setting a precedent that is likely to be repeated often over the next two years, given the Senate’s 50-50 split.
Biden is due to meet with House of Representatives Friday morning. The stimulus package has been one of the biggest factors supporting markets so far this year.
2. Jobs report
Markets looked primed for an upside surprise when the U.S. government releases its monthly labor market report at 8:30 AM ET (1430 GMT).
Forecasts made at the start of the week indicated a gain of 50,000 nonfarm jobs in the month through mid-January, but ADP’s private-sector payrolls report – which showed gains of 174,000 – and two successive positive surprises from weekly jobless claims suggest the labor market is healing somewhat faster than expected. The jobless rate is expected to stay at 6.7%.
Overnight, there were mixed signs from other big economies. German factory orders fell by 1.9% in December, more than expected, while the Reserve Bank of Australia outlined a relatively quick recovery from the pandemic thanks to the sharp rebound in Chinese demand for its commodities. That’s despite Beijing’s move to route import orders away from Australia in response to its criticism over China’s role in the pandemic.
3. Stocks set to build on record highs; Memes bounce in premarket
U.S. stocks are set to extend their gains on Friday, after a combination of positive labor market data and progress on the stimulus plan – all washed down by the continuing abundance of central bank liquidity – drove indices to new all-time highs on Thursday.
By 6:30 AM ET (1130 GMT), Dow Jones futures were up 145 points, or 0.5%, while S&P 500 futures were up in line and Nasdaq futures were lagging slightly with a gain of 0.3%.
Stocks likely to be in focus later include Peloton Interactive (NASDAQ:PTON), which fell 6.8% in premarket after warning that it was struggling to meet demand for its connected exercise bikes, and Ford Motor (NYSE:F), which rose 0.6% after saying it will have to idle production of the F-150 pickup because of a shortage of semiconductors.
GameStop (NYSE:GME), which was indicated up 7.4% in premarket trading after losing another 42% on Thursday. AMC Entertainment (NYSE:AMC), which lost 21% on Thursday, was indicated up 4.1%.
4. Kuaishou completes blockbuster IPO
China’s Kuaishou Technology (HK:1024), which operates the most popular short-video service in China after ByteDance Ltd.’s Douyin, soared 194% in its $5.4 billion Hong Kong Stock Exchange debut.
It’s the biggest tech IPO since Uber (NYSE:UBER) two years ago.
The Tencent-backed company was founded by former Google employee Su Hua and a partner in 2011, recorded an average of 264 million daily active users on its main Kuaishou app as of November.
5. Oil nears $60
Crude oil closed in on $60 a barrel for the first time in a year, as confidence in the global economic recovery dovetailed with falling world stockpiles, thanks to the continued output restraint of leading producers (especially Saudi Arabia).
By 6:40 AM ET, Brent crude futures were up 0.8% at $59.45 a barrel, having earlier traded as high as $59.74. U.S. crude futures were up 1.0% at $56.78 a barrel.
Data from Baker Hughes on active U.S. oil rigs will round off the week later, as usual, along with figures from the Commodity Futures Trading Commission on net speculative positioning in crude and other commodities. The most interesting data aside from oil may be for silver, which is ending a rollercoaster week up 1.7% at $26.68 an ounce.