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OFFON

Romain Fournier

Chief Editor
Having worked in the British, French and Swiss financial press, Romain is able to report on local and international issues, as comfortable in French as in the language of Shakespeare, Romain Fournier leads the editorial team at Marketscreener. Fine connoisseur of the English-speaking markets, Romain delivers an editorial every day on US and UK markets.

Job numbers are worse than expected

09/03/2021 | 08:57am EDT

The monthly US jobs report everybody was waiting for has finally been released. But there may be other things to worry about right now.

The New York area has just experienced a devastating storm, the human and financial costs of which are still difficult to estimate.

In China, the slowdown in economic momentum becomes more and more noticeable, illustrated by a depressed services PMI in August, in line with its manufacturing peer. China's Caixin Services Index for August entered the contraction zone at 46.7 points from 54.9 points in July. This deterioration is the result of a calmer economic phase colliding with measures taken by the central government to restore party-line compliant servility in certain sectors.

Growth in the eurozone’s services sectors also slowed in August, but to a much lesser extent. The PMI services sector dipped to 59 in August, down from 59.8 in July.

Despite the above-mentioned events that are dominating the financial and non-financial news, a wait-and-see attitude prevailed this morning until the announcement of the US employment figures for August. They are supposed to be a major variable for the Fed in the construction of its asset purchase reduction schedule. So, this is one of those doomsday sessions where many investors fear that anything can happen. But reality is always more complex, and almost never binary in finance.

U.S. job growth was below expectations due to lower demand for services and ongoing worker shortages, while COVID-19 infections surged. Nonfarm payrolls rose by 235,000 jobs last month after rising 1.053 million in July, the Labor Department said. The unemployment rate dropped to 5.2% from 5.4% in July. A Reuters survey of economists was expecting nonfarm payrolls to rise by 728,000 jobs.

Investors now have to position themselves against the usual paradox. Had the numbers been good - which is positive for the economy - markets could have been a little spooked by the prospect of an accelerated unraveling of the Fed's support plan. But these low figures - a negative economic signal – might be welcomed by investors because they mean continued monetary support for longer than expected.

 

Economic highlights of the day:

The final services PMIs for August are released throughout the day, along with the US employment report for August.

In the foreign exchange market, the euro continues to gain ground against the dollar at USD 1.1879. Gold is steady at 1812 USD per ounce. Oil is firm as well, just above USD 73 a barrel for Brent and at USD 69.82 a barrel for WTI. Government bond yields are little changed, with a Bund at -0.39% and a T-Bond at 1.29%. Bitcoin is trading at USD 49,500 apiece.

 

On markets:

* Amazon plans to launch its own TV set in the U.S. as early as October, being produced by outside companies including China's TCL Group, Business Insider reported Thursday.

* Broadcom expects to post fourth-quarter revenue ahead of market expectations on demand for its semiconductors related to 5G technology and the transition to hybrid work, combining office and remote work.

* JD.com - The online retailer's real estate arm has made an offer to buy about 26% of China Logistics Property Holdings from its largest shareholder for about HK$3.99 billion.

* Didi Global - The Beijing municipal government is considering a stake in the Chinese VTC group, which has been targeted by a cybersecurity investigation, Bloomberg News reported Friday. The stock gained as much as 7.8 percent in pre-market trading.

 

Analyst recommendations:

  • Asana: Baird raises Asana PT to $90 From $50, keeps Outperform rating
  • Asos: JP Morgan keep Buy rating, and adjusts the price target to GBp 6800 from GBp 6680.
  • Babcock: Jefferies remains Buy with a price target raised to GBp 425 and 450.
  • Brown-Forman: UBS adjusts price target to $74 from $70, maintains neutral rating
  • Costco Wholesale: Oppenheimer adjusts PT to $500 From $480, maintains Outperform rating
  • Five Below: UBS adjusts price target to $215 from $230, maintains neutral rating
  • Foot Locker: UBS adjusts price target on foot locker to $67 from $65, maintains neutral rating
  • Hill-Rom: Baird cut the recommendation to neutral from outperform. PT up 2.8% to $156
  • Oracle: Barclays adjusts price target to $85 from $83, keeps equal-weight rating
  • PVH: UBS adjusts price target to $159 from $145, maintains buy rating
  • Semtech: Stifel Nicolaus adjusts PT to $100 from $96, maintains Buy rating
  • Smith & Wesson Brands: Wedbush adjusts pt to $24 from $28, maintains neutral rating
  • Telos: DA Davidson initiates coverage on Telos with Buy rating, $45 PT
  • Veoneer: Danske Bank downgrades to hold from buy. PT up 2.5% to $37
  • Veeva: JMP Securities adjusts price target to $345 from $320, keeps outperform rating
  • VSE: Sidoti & Company initiated coverage with a recommendation of buy. PT raised 32% to $66

ę MarketScreener.com 2021
Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM, INC. 1.68% 3376.07 Delayed Quote.1.95%
ASANA, INC. -7.79% 125.62 Delayed Quote.325.11%
ASOS PLC 2.10% 2668 Delayed Quote.-44.22%
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.05% 0.6481 Delayed Quote.2.43%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.11% 0.7521 Delayed Quote.-2.64%
BABCOCK INTERNATIONAL GROUP PLC -0.37% 327.4 Delayed Quote.16.97%
BARCLAYS PLC 0.95% 202.8 Delayed Quote.38.26%
BITCOIN (BTC/EUR) 1.36% 52727 Real-time Quote.120.98%
BITCOIN (BTC/USD) 1.47% 61197 Real-time Quote.111.13%
BRITISH POUND / EURO (GBP/EUR) -0.02% 1.1864 Delayed Quote.5.95%
BRITISH POUND / US DOLLAR (GBP/USD) 0.03% 1.37702 Delayed Quote.0.65%
BROADCOM INC. 2.26% 533.87 Delayed Quote.19.23%
BROWN-FORMAN CORPORATION -0.06% 69.32 Delayed Quote.-12.68%
CANADIAN DOLLAR / EURO (CAD/EUR) -0.05% 0.695681 Delayed Quote.8.12%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.00% 0.80694 Delayed Quote.2.86%
CHINA LOGISTICS PROPERTY HOLDINGS CO., LTD -0.47% 4.24 End-of-day quote.-6.61%
COSTCO WHOLESALE CORPORATION -0.93% 485.53 Delayed Quote.28.86%
DANSKE BANK A/S 1.63% 118.25 Delayed Quote.15.60%
DIDI GLOBAL INC. -4.76% 8.41 Delayed Quote.0.00%
EURO / US DOLLAR (EUR/USD) 0.06% 1.1602 Delayed Quote.-4.96%
FIVE BELOW, INC. -0.99% 193.91 Delayed Quote.11.93%
FOOT LOCKER, INC. -2.27% 48.27 Delayed Quote.19.36%
HILL-ROM HOLDINGS, INC. 0.04% 154.72 Delayed Quote.57.86%
INDIAN RUPEE / EURO (INR/EUR) -0.23% 0.011486 Delayed Quote.2.39%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.16% 0.013333 Delayed Quote.-2.72%
JD.COM, INC. -3.29% 81.48 Delayed Quote.-7.30%
LONDON BRENT OIL -0.10% 85.93 Delayed Quote.65.76%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.09% 0.71606 Delayed Quote.-0.20%
ORACLE CORPORATION -0.93% 96.98 Delayed Quote.51.32%
PVH CORP. -0.41% 111.75 Delayed Quote.19.51%
S&P 500 0.18% 4574.79 Delayed Quote.21.00%
S&P GSCI CRUDE OIL INDEX 0.59% 460.7035 Delayed Quote.72.63%
SEMTECH CORPORATION 0.45% 80.54 Delayed Quote.11.22%
SMITH & WESSON BRANDS, INC. -2.43% 21.64 Delayed Quote.21.92%
TELOS CORPORATION -2.27% 25.89 Delayed Quote.-21.50%
UBS GROUP AG 1.25% 16.565 Delayed Quote.31.19%
US DOLLAR / EURO (USD/EUR) -0.06% 0.86192 Delayed Quote.5.22%
VEEVA SYSTEMS INC. 0.42% 322.99 Delayed Quote.18.64%
VEONEER, INC. -0.17% 35.14 Delayed Quote.64.98%
VSE CORPORATION -0.97% 50.15 Delayed Quote.30.29%
VSEOBECNA UVEROVA BANKA, A.S. 0.00% 157 End-of-day quote.4.67%
WTI -0.24% 84.045 Delayed Quote.70.78%