U.S. jobs report casts doubt on economic rebound


Futures: Dow up 0.29%, S&P flat, Nasdaq down 0.43%.

Aug 6 - The S&P 500 was set for a muted open on Friday, as a solid rise in jobs in July sparked concerns of higher inflation at a time when Delta variant of the coronavirus has cast a shadow over a broader economic rebound.

The Labor Department's report shows nonfarm payrolls grew by 943,000 jobs last month amid demand for workers in the labor-intensive services industry, higher than economists expectation of 870,000.

This good news brings pain for the bond market; The dollar will expand and yields will go up and that could cap stocks a bit, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

This report indicates that wage inflation is pick up, it certainly indicates inflation has more staying power and is not necessarily temporary.

The much-awaited jobs numbers dovetail with data showing a further decline in U.S. unemployment claims last week and strong corporate earnings reports, which lifted the Nasdaq and S&P 500 indexes to record closes on Thursday.

However, all of the three nominal indexes are likely to end the week with nominal gain following a stellar corporate earnings season, fears of higher inflation, leading to a sudden tapering in monetary policy, hurt sentiment

Focus now turns to a meeting of Federal Reserve leaders in Jackson Hole, Wyoming, to discuss policy and decide future stimulus strategy.

ET, Dow had e-minis up 103 points, or 0.29%, S&P 500 e-minis up 1.75 points, or 0.04% and Nasdaq 100 e-minis were down 65 points, or 0.43%.

On the earnings front, American International Group Inc rose 2.3% in premarket trading as it beat second-quarter profit estimates on Thursday.

Zynga Inc tumbled 15.1% after this announcement a disappointing forecast for bookings and issuing a potential acquisition worth over 50 billion dollars.

Stocks in the U.S. - listed sectors of ride-hailing platform Didi Global Inc increased 5.8% as Bloomberg News reported that it was considering giving up control of its valuable data as part of efforts to solve a Chinese regulatory probe.

After raising its net sales forecast for this year, Corteva Inc rose 5%.

Analysts expect second-quarter profit growth of 92.9% for S&P 500 companies, according to IBES data from Refinitiv. Of the 327 companies in the Index who have been reporting earnings so far, 87.6% beat analysts expectations, the highest on record.