Friday June 1st

1-06-2018

Dow set to rise more than 100 points after stronger-than-expected jobs report

U.S. stock index futures rose ahead of Friday's open, pointing to a rebound from losses seen in the previous session, after the release of better-than-expected employment data. Dow Jones industrial average futures climbed 131 points, indicating a higher open of 138.16 points. Nasdaq 100 and the S&P 500 futures, meanwhile, also indicated a positive start to the session for their respective markets. The gains were muted slightly as interest rates rose, however. The benchmark 10-year note yield traded at 2.908 percent as of 8:42 a.m. ET. The U.S. economy added 223,000 jobs in May, while economists polled by Reuters expected a gain of 188,000. Average hourly earnings, meanwhile, rose 0.3 percent last month while the unemployment rate ticked down to 3.8 percent. President Donald Trump touted the report ahead of its release, saying in a tweet: "Looking forward to seeing the employment numbers at 8:30 this morning." Friday's premarket gains came as stocks fell Thursday after Trump slapped tariffs on the European Union, Mexico and Canada. The EU followed up the U.S. announcement by saying it would impose countermeasures of its own, while Canada Foreign Minister Chrystia Freeland said the country plans to slap dollar-for-dollar tariffs on the U.S. Trump's tariffs sent stocks lower, with the Dow closing 251 points lower on Thursday. Mexican and Canadian stocks also fell. Elsewhere, political turmoil in Italy that had spooked global markets this week took a back seat after anti-establishment parties in the country came to a consensus on forming a coalition government. North Korean officials will deliver a letter from Kim Jong Un to Trump on Friday in Washington, according to Secretary of State Mike Pompeo, the latest sign that a canceled summit between the two leaders could be back on. On the earnings front, Abercrombie & Fitch is due to report new figures before the opening bell. Asian markets closed mixed early on Friday, with investors cautious over trade tensions after the U.S. announced tariffs on steel and aluminum imports from several of its allies would be reapplied. The Nikkei 225 edged down by 0.14 percent, or 30.47 points, to 22,171.35 and the broader Topix rose 0.1 percent. Over in South Korea, the Kospi rose 0.66 percent to close at 2,438.96, outperforming its regional peers. Elsewhere, Hong Kong's Hang Seng Index tacked on 0.12 percent by 3:27 p.m. HK/SIN amid gains in developers and energy stocks. On the mainland, stocks finished the session lower as China A shares made their long-awaited debut on MSCI's Emerging Markets Index. The Shanghai composite declined 0.65 percent to close at 3,075.46 and the Shenzhen composite fell 1.2 percent to 1,746.33. Benchmarks in Hong Kong and on the mainland had gained more than 1 percent in the last session. Crude futures fell on Friday, with the U.S. benchmark set for a second consecutive week of declines as American oil output comes close to matching that of top producer Russia. North Sea Brent crude's premium over West Texas Intermediate (WTI) futures remained near three-year highs above $10 a barrel, having surpassed $11 on Thursday. The premium has doubled in less than a month, as a lack of pipeline capacity in the United States has trapped a lot of output inland. "The WTI/Brent spread is wide far down the curve and apparently not reflecting the notion that easing infrastructural constraints and slower U.S. supply growth should begin to reconnect both markets in the medium term," JBC said in a note. WTI fell 40 cents to stand at $66.64 a barrel by 9:01 a.m. ET (1301 GMT), bouncing off a session low of $66.81 and having fallen almost 2 percent on Thursday. Global benchmark Brent was down 41 cents at $77.15 per barrel. "The WTI/Brent spread is wide far down the curve and apparently not reflecting the notion that easing infrastructural constraints and slower U.S. supply growth should begin to reconnect both markets in the medium term," JBC said in a note. WTI fell 40 cents to stand at $66.64 a barrel by 9:01 a.m. ET (1301 GMT), bouncing off a session low of $66.81 and having fallen almost 2 percent on Thursday. Global benchmark Brent was down 41 cents at $77.15 per barrel.