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U.S. Stocks Mixed As Traders Wait For Additional Catalysts

By:
Vladimir Zernov
Published: Aug 31, 2020, 12:39 UTC

S&P 500 futures are mixed in premarket trading as traders prepare for a busy week.

U.S. Stock Market

In this article:

A Busy Week Ahead

S&P 500 futures are little changed in premarket trading as traders prepare for a busy week that will be full of important economic reports.

On Tuesday, traders will digest Manufacturing PMI data for August. Manufacturing PMI is expected to increase from 50.9 to 53.6. On Wednesday, market participants will focus on ADP Employment Change report which is projected to show that 900,000 jobs were created in the private sector.

The end of the week will bring the most important employment reports, including Initial Jobless Claims on Thursday and Non Farm Payrolls on Friday.

Initial Jobless Claims are expected to stay near the 1 million mark while Non Farm Payrolls are projected to decline to 1.4 million.

The upcoming U.S. employment reports will test the recent market upside which is based on the assumption that the current economic recovery is robust.

Oil Moves Higher As Abu Dhabi National Oil Company Cuts Supplies In October

Hurricane Laura did not deal significant damage to oil infrastructure but oil received another bullish catalyst. Abu Dhabi National Oil Company has notified its clients that October supplies will be reduced by as much as 30%.

The main reason for this reduction is the necessity to stay in line with the OPEC+ production cut agreement.

While United Arab Emirates were not seen as a major laggard among the participants of the deal, OPEC+ leadership continues to push for full compliance from all countries which is bullish for the oil market.

Additional oil price upside may help big oil stocks like Exxon Mobil or Chevron which have recently found themselves under material pressure.

U.S. Government Bond Yields Continue To Rise

U.S. government bond yields continue their upside move which was triggered by Fed’s decision to target an average inflation of 2%. Not surprisingly, the 30-year bonds are especially sensitive to inflation threat.

This move has already prompted speculation that Fed will start buying 30-year bonds to keep yields under control. Additional asset purchases are typically bullish for the stock market.

However, it remains to be seen whether the bond market has already reached the point when the Fed is ready to intervene.

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

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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