S&P 500 Futures: Coronavirus fears probe bulls around record top

• S&P 500 Futures struggles for clear direction, edges higher of late.
• Latest COVID-19 numbers from Australia, New Zealand and the UK renew covid woes, Japan up for extending virus-led emergency.
• WHO cites the risk of another covid strain ‘Mu’ that resists vaccines.
• US data keeps traders hopeful ahead of the key jobs report for August.

S&P 500 Futures remain sluggish above 4,500, down 0.03% near 4,520 amid early Thursday. The risk barometer refreshed record top on Tuesday but has been inactive since then while portraying the market’s indecision.

While the latest US data keeps traders hopeful of no or delayed Fed tapering, the coronavirus woes seem to challenge the market’s risk appetite of late. Also, the cautious sentiment before the key US Nonfarm Payrolls (NFP) and chatters over the European Central Bank’s (ECB) reduction of weekly bond purchases also sour the mood.

The US ADP Employment Change for August rose 374K versus expectations of a 613K rise. Further challenging the jobs scenario was the employment component of the ISM Manufacturing PMI that slumped to the contraction region with the 49.0 figures against 52.9 prior. It’s worth noting that the previously easing virus numbers from Australia and a softening of the hospitalizations in the US also underpinned the market sentiment earlier.

However, a record jump in Australia’s daily covid cases and by 1,466 cases for Wednesday, per the latest data from ABC News, joins worrisome virus numbers from New Zealand and the UK to back the risk-off mood. the UK’s virus-led deaths rose past 200 for the first time since March the previous day. The UK Mirror said, “Coronavirus cases in the UK have on Wednesday risen by 35,693 with a further 207 deaths recorded in the last 24 hours – this is the first time daily deaths have risen above 200 since March.”  

On the same line, New Zealand also crosses the 700 mark for the COVID-19 cases with the recent 49 daily numbers whereas “Japan is considering extending the COVID-19 state of emergency covering Tokyo and 20 of Japan’s 47 prefectures by another two weeks”, per Kyodo News.

Read: Covid updates for New Zealand/Australia, lockdowns continue

Elsewhere, Germany’s Bundesbank President Jens Weidmann backed the ECB tapering chatters on the bloc’s upbeat data.

While the latest chatters over tapering at the Fed and the ECB keeps market players on the edge, grim covid updates also question the optimists. Hence, market sentiment is likely to remain sluggish ahead of tomorrow’s US jobs report. Though, second-tier US employment data like Nonfarm Productivity for Q2 and weekly jobless claims will decorate the calendar and offer intermediate moves.

Read: US Stocks Forecast: This could be blue skies for Wall Street, tech leads the way