Weak Jobs Data Has Stock Futures Slipping

The ADP Employment report came in much lower than estimates

Assistant Editor
Dec 2, 2020 at 9:18 AM
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Futures on the Dow Jones Industrial Average (DJI) are down over 125 points this morning, cutting into yesterday's strong start to December. S&P 500 (SPX) and Nasdaq Composite (IXIC) futures are pointed below fair value as well, despite news that the U.K. granted emergency authorization of Pfizer (PFE) and BioNTech's (BNTX) coronavirus vaccine, with citizen vaccination to start next week. The Federal Drug Administration (FDA) has a meeting on Dec. 10 to discuss the same vaccine's authorization in the U.S. What seems to be weighing on investors is a lackluster ADP Employment report that showed 307,000 new jobs for November, far below the expected 475,000 and the smallest increase since July.

Continue reading for more on today's market, including:

  • Schaeffer's Senior Quantitative Analyst Rocky White outlines what to expect from the Dow now that it has hit 30,000.  
  • We dug into this chip stock's recent options surge
  • Plus, new stock plummets on downgrade; CRM drops after acquisition confirmation; and Disney praised on potential recovery. 

StockFutures Dec 2

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 2.1 million call contracts traded on Tuesday, and 778,007 put contracts. The single-session equity put/call ratio fell to 0.37 and the 21-day moving average dropped to 0.43. 
  2. Palantir Technologies (NYSE:PLTR) is down 9.5% in pre-market trading, after Morgan Stanley downgraded the stock to "underweight" from "equal weight." The firm stated that given PLTR's surge since its initial public offering (IPO) there's been "very little change in the fundamental story," making the risk/reward model is decidedly negative. In the last month, the equity is up 153.4%. 
  3. Salesforce.com (NYSE:CRM) is down 6% before the bell, after the company officially acquiring Slack Technologies (WORK) for over $27 billion in a cash and stock deal -- it's largest ever. The deal values Slack at over 24 times its estimated revenue for next year. Year-to-date, CRM is up around 40% heading into today.
  4. Walt Disney (NYSE:DIS)  is up 0.4% in electronic trading, after Citigroup upped its price target to $175 from $150 while keeping its "buy" rating. The firm expects a steady recovery from the pandemic, while also noting the continued momentum of Disney's streaming apps. In the past six months, DIS is up 25.8%. 
  5. Today will bring the Federal Reserve's "Beige book".

Buzz Chart Dec 2

European Stocks Fall from Recent Rally

Asian markets were mixed today, after U.S. markets skyrocketed to record levels overnight. Hong Kong’s Hang Seng dropped  0.1%, and China’s Shanghai Composite pulled back 0.07%, after shares of Chinese electronic company Xiaomi and developer Evergrande Property Services shed 7.1% and 2.5% for the day, respectively. Elsewhere, South Korea’s Kospi was 1.6% higher, while Japan’s Nikkei jumped 0.05%.

In Europe, stocks are mostly lower, despite the United Kingdom becoming the first country to approve the Pfizer (PFE) and BioNTech (BNTX) coronavirus vaccine. The negative price action came after U.S. stock futures failed to get a boost from the major averages’ records this morning, and Brexit discussions moved forward. In turn, the German DAX was last seen down 0.7%, while France’s CAC 40 has dropped 0.4%, and London’s FTSE 100 added 0.2%.

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