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NYC Vaccine Mandate, Clarida Speech, ADP; GM Earnings - What's Moving Markets

EconomyAug 04, 2021 18:48
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By Geoffrey Smith -- New York City imposes the U.S.'s first vaccine mandate on the general public, while China shuts down more and more transport links and tourism venues to stop its Covid-19 outbreak, hitting oil prices. ADP is due to release its monthly labor market survey and the Fed's thinker-in-chief Richard Clarida will speak on the outlook for monetary policy. CVS, General Motors (NYSE:GM) and Electronic Arts (NASDAQ:EA) lead the day's earnings roster, while crypto assets are still hurting after Gary Gensler's attack on them on Tuesday. Here's what you need to know in financial markets on Wednesday, 4th August.

1. NYC's vaccine mandate and China's shutdowns

New York City introduced a vaccination mandate for all those looking to use indoor public spaces, the first of its kind in the U.S.   A certificate of vaccination will be needed for all those working in or visiting indoor dining areas, gyms, theaters and concert venues.

“It’s time for people to see vaccination as literally necessary to living a good and full and healthy life,” NYC Mayor Bill de Blasio said.

The move comes a day after the Biden administration intervened to extend a ban on tenant evictions in most counties across the U.S.  It cited the risks of spreading Covid-19, although critics saw it more as an economic measure aimed at protecting low-income families.

In China, meanwhile, the spread of the coronavirus prompted more local shutdowns of public transport, tourism and entertainment venues, adding to concerns of an economic slowdown there.

2. Fed's Clarida to speak; ADP hiring due

Richard Clarida, widely seen as the most influential ‘thought leader’ at the Federal Reserve, will speak on monetary policy at 10 AM ET (1400 GMT), with his comments likely to be scanned for any hint of willingness to start reducing the Fed’s bond purchases before the end of this year.

Before that, payrolls processor ADP will release its monthly data for private-sector hiring in the month through mid-July. The correlation between ADP’s data and the government’s labor market data, which are due on Friday, has weakened during the pandemic, but will still be taken as a rough guide of overall developments. Analysts expect some 695,000 people to have been hired, little changed from last month’s survey.

Elsewhere, final purchasing managers indices for the Eurozone in July were revised down slightly but the composite PMI of 60.2 was still a record high.

3. Stocks set to open mixed; Robinhood's rally and GM earnings eyed

U.S. stocks are set to open mixed later, pulling back only slightly from a record close in the S&P 500.

By 6:15 AM ET, Dow Jones futures were down 12 points, less than 0.1%, while S&P 500 futures were effectively flat from Tuesday’s close. Nasdaq 100 futures edged up by less than 0.1%.

Earnings updates are due from CVS Health (NYSE:CVS), Booking (NASDAQ:BKNG), General Motors, Kraft Heinz (NASDAQ:KHC) and Electronic Arts, among others. EA’s report follows a strong update late on Tuesday from Activision Blizzard (NASDAQ:ATVI), which also announced the departure of a number of executives linked to a gender discrimination scandal.

Oil stocks Occidental (NYSE:OXY) and Devon Energy (NYSE:DVN) may also gather attention after beating expectations with their results on Tuesday, while Robinhood (NASDAQ:HOOD) stock was up 8% in premarket, extending a retail-driven rally that seemed purely sentiment-driven.

4. Crypto bruised by Gensler salvo

Gary Gensler, the head of the Securities and Exchanges Commission, called on Congress to give him more powers to tackle rampant “fraud, scams and abuse” in cryptocurrency markets.

Gensler said crypto’s chief attraction for many still seemed to be its use in ransomware attacks and other illegal activity. 

Bitcoin weakened further below $40,000 on Gensler’s remarks, dragging other crypto assets down with it. By 6:15 AM ET, it was down 2.5% at $37,745.

5 Oil edges lower as tanker standoff resolved, Chinese worries mount

Oil prices weakened again but held above $70 a barrel, amid growing fears that China’s anti-Covid-19 measures will hit fuel consumption there.

By 6:15 AM ET, U.S. crude futures were down 0.6% at $70.17 a barrel, while Brent futures were down 0.3% at $72.17 a barrel.

The market is slowly pricing in a higher political risk around the return of Iranian oil to the market, highlighted again by the temporary seizure of the Asphalt Princess, a UAE-flagged tanker, in the Gulf of Oman by Iranians. The incident was declared resolved overnight.

The U.S. government publishes its weekly inventories data at 10:30 AM ET, after the American Petroleum Institute estimated on Tuesday that they fell by less than expected.


NYC Vaccine Mandate, Clarida Speech, ADP; GM Earnings - What's Moving Markets

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