Strong Non Farm Payrolls Report Boosts Markets

Stocks Set To Open Higher After Long Weekend

U.S. markets were closed on Friday so traders did not have the opportunity to react to Non Farm Payrolls and Unemployment Rate reports for March.

Non Farm Payrolls report indicated that the economy added 916,000 jobs compared to analyst consensus of 647,000. Unemployment Rate declined from 6.2% in February to 6% in March, in line with the analyst consensus.

The strong Non Farm Payrolls report provided material support to markets, and S&P 500 futures are gaining about 0.5% in premarket trading. Meanwhile, Treasury yields are moving higher as traders bet on higher inflation. Interestingly, higher Treasury yields did not put any pressure on tech stocks, and Nasdaq futures are also up by about 0.5% in premarket trading.

WTI Oil Falls Below The $60 Level On Virus Worries

WTI oil gained downside momentum and moved below the psychologically important $60 level as traders focused on negative developments in India. Yesterday, India reported more than 100,000 new coronavirus cases.

The situation in the world’s second country by population is getting worse, and India may be forced to introduce additional virus containment measures which will be bearish for oil and other commodities.

It is not clear whether the recent OPEC+ decision to gradually increase production is playing a role in the current sell-off as the market has initially reacted positively to the news. At this point, it looks like traders will pay close attention to the situation in India. If the number of new coronavirus cases continues to increase, oil may find itself under additional pressure.

All Eyes On Services PMI Report

Soon after today’s trading session begins, the U.S. will release the final reading of Services PMI report for March. Analysts expect that Services PMI increased from 59.8 in February to 60 in March. A positive surprise is possible as the recent Non Farm Payrolls report was strong. A better-than-expected Services PMI report may provide additional support to stocks.

The U.S. will also provide Factory Orders data for February. Factory Orders are projected to decrease by 0.5% month-over-month after growing by 2.6% in January.

For a look at all of today’s economic events, check out our economic calendar.