Friday September 2nd

2-09-2016

US futures rise after jobs report miss

U.S. stock index futures indicated indicated a higher open Friday as investors digested a weaker-than-expected August jobs report. The U.S. economy added 151,000 jobs last month, with the unemployment rate coming in at 4.9 percent. Economists were forecasting 180,000 nonfarm jobs were created in August, and the unemployment rate was expected to fall to 4.8 percent according to Thomson Reuters. The report follows July's 255,000 jobs, and comes after two robust months of hiring removed concerns about an especially weak labor market in May. Dow futures were up about 50 points following the report's release, while S&P and Nasdaq futures gained 6.75 points and 20 points, respectively. Futures on the three major indexes pointed to a slightly lower open about 10 minutes before the report's release. Investors were closely eyeing the jobs report as they looked for more clues about when the Federal Reserve may raise rates. Market expectations for a rate hike in September were just 12 percent following the report. "The hullaballoo around payrolls is for once justified, with Fed Vice Chair Fischer suggesting it would be a critical factor for September 21 rate decision, even if the wisdom of central bankers putting so much store on a single month's reading of a data series that is horrendously erratic, and subject to large revisions, has to be questioned," Marc Ostwald, strategist at ADM Investor Services, said in a note Friday morning. Other data due Friday include factory orders, which will be released at 10 a.m. ET and there will be a speech at 1 p.m. ET by Richmond Fed President Jeffrey Lacker. U.S. stocks closed mostly flat Thursday as investors digested a slew of economic data ahead of Friday's key jobs report. The Dow Jones industrial average closed about 15 points higher, after briefly falling more than 100 points. On Friday, European stocks were mostly higher and Asian markets finished the session mixed. apan's Nikkei 225 finished flat at 16,925.68, closing at levels not seen since early June 2016. Across the Korean Strait, the Kospi closed up 5.59 points, or 0.28 percent, to 2,038.31. In Hong Kong, the Hang Seng index closed up 104.36 points, or 0.45 percent, at 23,266.70. Chinese mainland markets closed mixed, with the Shanghai composite up 4.19 points, or 0.14 percent, at 3,067.49. The Shenzhen composite shed 8.17 points, or 0.40 percent, to 2,009.29. Oil prices extended gains on Friday as the dollar fell after the Labor Department's report on August job gains missed expectations. The weaker-than-expected reading is seen reducing the chance of a Federal Reserve interest rate rise soon. Higher interest rates would likely strengthen the U.S. currency, which could depress demand for dollar-denominated oil, as the commodity becomes more expensive for holders of other currencies. Oil edged higher earlier, supported by the previous session's weakness in the U.S. dollar and Russian comments in favor of a production freeze, though contracts remained on track for the biggest weekly loss in nearly eight months. Global benchmark Brent crude futures were up $1.03, or 2.3 percent, at $46.48 a barrel by 8:33 a.m. ET (1233 GMT) but were on course for a roughly 7 percent decline over the week. U.S. West Texas Intermediate crude were up 85 cents, or 2 percent, at $44.01 a barrel, on track for a 7.5 percent weekly loss. Gold futures rose to their highest level in a week on Friday after the release of U.S. nonfarm payrolls data. Spot gold was up 0.93 percent at $1,325.59 an ounce, after having hit its lowest since June 24 at $1,301.91 on Thursday after jobless claims data beat expectations. U.S. gold futures were up 1.05 percent to $1,330.90 an ounce, and rose as much as $1,334. Less than five minutes before the data were released, gold futures and spot gold were both up about 0.2 percent.