(Bloomberg) — U.S. equity-index futures were mixed on Friday amid a rotation away from mega-cap tech stocks, hours before key jobs data in Washington and a three-day weekend in America.
Contracts on the Nasdaq 100 trimmed losses, while those on the S&P 500 and Dow Jones Industrials Average turned higher. The gauges had all tumbled on Thursday and in the wake the tech-heavy Nasdaq future had slipped as much as 1.9%. The Stoxx Europe 600 index erased an initial loss as banks gained on the back of a potential merger between two of Spain’s biggest lenders.
Drops in Tokyo, Shanghai and Hong Kong were smaller than those seen in the U.S. overnight, as trader focus turned to the non-farm payrolls report later Friday. Treasuries and the dollar were steady in the final session before the Labor Day holiday in the U.S. on Monday, with moves into haven assets muted despite the pronounced drop in equities. Gold ticked higher.
Global equities have pulled back from all-time highs just as the strong recent run-up showed signs of broadening into other sectors. While data Thursday showed applications for jobless claims fell last week, U.S. investors may need evidence of a fuller economic recovery after a 60% run-up in the S&P 500 since its March lows.
“Given the market’s seemingly relentless climb higher on the back of the mega-cap tech names, it should be no surprise that a pullback was in the offing as the market became increasingly extended and overbought,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. This could be “an overbought market that is burning off froth, following end-of-the-month portfolio adjustments as managers needed to catch up,” he said.
Meanwhile, investors are monitoring progress on a vaccine for the pandemic and continued signals of support from central banks and government to support the economy.
Elsewhere, oil declined. Emerging-market stocks fell for a third day, with MSCI’s benchmark gauge heading for its biggest weekly drop since April. The Cboe Volatility Index — a measure of expected price swings for the S&P 500 Index known as Wall Street’s “fear gauge” — rose to the highest level since June.
Here are some key events coming up:
U.S. jobs report Friday is forecast to show payrolls continued to rebound in August from virus lows.
Here are the main market moves:
Stocks
The Stoxx Europe 600 Index climbed 0.2% as of 8:34 a.m. London time.Futures on the S&P 500 Index were little changed.Nasdaq 100 Index futures dipped 0.4%.The MSCI Asia Pacific Index sank 1.1%.
Currencies
The Bloomberg Dollar Spot Index fell 0.1%.Sterling strengthened 0.1% to 0.8916 per euro.The Japanese yen was unchanged at 106.19 per dollar.South Africa’s rand weakened 0.1% to 16.7406 per dollar.
Bonds
The yield on 10-year Treasuries gained one basis point to 0.64%.Germany’s 10-year yield climbed less than one basis point to -0.48%.Britain’s 10-year yield increased one basis point to 0.247%.Belgium’s 10-year yield advanced less than one basis point to -0.22%.
Commodities
West Texas Intermediate crude decreased 0.1% to $41.33 a barrel.Gold strengthened 0.3% to $1,937.59 an ounce.Silver strengthened 1% to $26.84 per ounce.Iron ore declined 1.1% to $122.90 per metric ton.
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