May 6 (Reuters) - Welcome to the home for real-time coverage of U.S. equity markets brought to you by Reuters stocks reporters and anchored today by April Joyner. Reach her on Messenger to share your thoughts on market moves: april.joyner.thomsonreuters.com@reuters.net

 

PRIVATE JOBS PLUNGE BY A DIZZYING 20.2 MILLION - ADP (1005 EDT/1405 GMT)

As expected, data released on Wednesday showed the United States shed a record-shattering number of jobs in April, as mandated shutdowns to curb the COVID-19 pandemic shuttered businesses and brought the economy to a sudden, grinding halt.

The private sector shed a jaw-dropping 20.2 million jobs in April, according to payrolls processor ADP.

As ghastly as that number is, it's 814,000 fewer than the whopping 21.1 million reduction in private payrolls analysts expect from the Labor Department's more comprehensive jobs report due Friday.

"This report just confirms what everyone already knows, namely, that job losses in April were on an unprecedented scale," wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.

While the carnage isn't over, a rebound could start as soon as June.

"In May, we think payrolls will drop by a further 12M," Shepherdson added. "In June, though, we expect the rebound to begin in the wake of the re-opening now underway in about half the country."

Separately, mortgage demand eked out a small 0.1% gain last week, despite interest rates falling, according to the Mortgage Bankers Association (MBA).

A 3-basis-point drop in the average 30-year fixed contract rate 3.40%, the lowest in the survey's history, resulted in an uptick of applications to purchase homes. But that gain was offset by refi demand edging lower.

"Although purchase activity remains almost 19 percent below year-ago levels, this annualized deficit has decreased as more states reopen amidst the apparent, pent-up demand for homebuying," said Mike Fratantoni, chief economist at MBA.

The bleak ADP data appears to have been largely baked into the markets. The S&P 500 and Dow were slightly lower, while tech shares kept the Nasdaq afloat.

(Stephen Culp)

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NASDAQ 100: STILL BUMPING UP AGAINST A CEILING (0925 EDT/1325 GMT)

With its concentration in large-cap tech and FANG stocks, the Nasdaq 100 .NDX remains a market leader. On Tuesday the index hit a more than 2-month high, and it has now risen as much as 33.4% from its March intraday low.

That said, CME e-mini Nasdaq 100 futures NQcv1 failed to confirm this high on Tuesday, and, like the NDX, continue to flirt with an especially tough barrier defined by the 76.4%/78.6% Fibonacci retracement zone of its February-March collapse (9,008.23/9,076.75). (Click on chart below.)

Meanwhile, daily momentum continues to struggle. The RSI on the futures has steadily risen from deeply oversold levels in late February, but at about 62, it remains shy of the 70.00 overbought threshold. If this study fails to manifest enough strength to reclaim overbought territory, it could add credence to the notion that the recent rally is merely a bear-market bounce.

Therefore, if NQcv1 and NDX fail at their Fibonacci barriers and reverse below their May 4 lows (8,556.25/8,665.401) in the absence of a massive rotation, the market could well be in grave danger again.

Conversely, given what has been their leadership position in the recent advance, if both the NQcv1 and NDX can close above the upper bounds of their maximum retracement barriers (9,076.75/9,102.135), with their RSIs ending above 70.00, that could suggest potential for them to challenge or exceed their February peaks. In that event, the market as a whole would likely have further room to run. 

 

(Terence Gabriel)

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STOCK FUTURES EDGE HIGHER DESPITE GRIM JOBS DATA (0900 EDT/1300 GMT)

S&P e-minis ESc1 ticked higher on Wednesday, though they briefly pared some gains after private payroll data from ADP showed a record loss of 20 million jobs in April. 

In other news, the U.S. Treasury Department announced it will launch a 20-year bond. The announcement follows its statement that it expects to borrow $2.999 trillion during the April-June quarter - five times larger than the previous single-quarter record set during the 2008 financial crisis - in the wake of the novel coronavirus outbreak. Treasury yields rose following the announcement. 

(April Joyner)

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(Terence Gabriel is a Reuters market analyst. The views expressed are his own)