Thursday March 3rd

3-03-2016

Futures mostly lower as Street awaits data

U.S. stock index futures pointed to a flat to lower open on Thursday, as investors started the countdown to Friday's jobs report, while digesting the economic data of the week so far. Ahead of the opening bell, weekly jobless claims came in at 278,000. Revised fourth-quarter productivity declined 2.2 percent, while unit labor costs rose 3.3 percent. The key data for the day is the ISM non-manufacturing survey for February due at 10 a.m. ET. The figure is expected at 53, down from 53.5 in January. It had been 55.8 the month earlier and in January a big part of the decline was in business activity. There is also Markit services PMI at 9:45 a.m., and that is expected at 50.5 after a surprising decline to 49.8 in January. Any reading below 50 signals contraction, and that drop had spooked traders. Factory orders is due at 10:00 a.m. The big report to watch, however, is the February employment report Friday morning, and it's expected to show 190,000 jobs and an unemployment rate of 4.9 percent, according to Thomson Reuters. Global Head of G10 strategy, Steven Englander said general consensus for the nonfarm payrolls is 195,000, with Citi economists predicting 200,000. "If we get the consensus or stronger, the focus will be U.S. rates and the dollar, both headed up. If we get our economists' forecasts then the inflation and labor market tightness concerns are more subdued. It would give the Fed leeway to signal pause, without being a sign of economic disaster, so more an equities play," he said. "The other question is whether there is a reading that would put March on the table/lean the Fed hawkish, or that would take June completely off the table. It is very hard to imagine a circumstance now in which either occurs," he added. There are also earnings from Ambarella, Hewlett Packard Enterprise, Wingstop, Broadcom, H&R Block and Planet Fitness after the close. Dallas Fed President Rob Kaplan speaks at 10:45 a.m. ET on the economy and monetary policy. European equities paused for breath after a rally in equities over the past few days, after Asian stocks ended higher on Thursday. Hong Kong's Hang Seng index was the odd one out as markets across Asia extended gains on Thursday ahead of a series of key global events due to take place in the coming days. Japan's benchmark Nikkei 225 closed up 213.61 points, or 1.28 percent, at 16,960.16 while the broader Topix gained 19.44 points, or 1.44 percent, to 1,369.05. South Korea's Kospi added 10.75 points, or 0.55 percent, to 1,958.17. Meanwhile, Hong Kong's Hang Seng index lost 0.73 percent in afternoon trade. Chinese markets finished the session mixed, with the Shanghai composite gaining 10.24 points, or 0.36 percent, to 2,859.92. The smaller Shenzhen composite closed down 2.45 points, or 0.13 percent, at 1,758.13. Oil prices were lower Thursday after ballooning U.S. crude inventories and a lack of any fresh action from the world's largest producer to temper supply snuffed out some of the bullish sentiment that has built this week. Brent futures fell 29 cents to $36.64 a barrel at 8:33 a.m. (1333 GMT), while U.S. crude futures fell 25 cents to $34.41. Gold edged back above $1,240 an ounce on Thursday as equity markets retreated, sharpening appetite for the metal as an alternative asset, but moves were muted ahead of Friday's key U.S. payrolls data. Spot gold was up 0.15 percent at $1,242 an ounce, while U.S. gold futures for April delivery were up $1.10 an ounce at $1,242.80. Gold has risen nearly 17 percent this year, hitting a one-year high of $1,260.60 an ounce last month as stock market volatility picked up on fears over the health of the global economy.