By Mark DeCambre, MarketWatch
Slowing job gains may reinforce view of a less aggressive
Fed
U.S. stock-index futures pared losses Friday, pointing to a flat
open after a report from the Labor Department showed the U.S.
economy adding a less-than-expected 155,000 jobs in November--data
investors are parsing ahead of the Federal Reserve's last
rate-setting gathering of 2018.
How are the benchmarks performing?
Stock-index futures turned positive following the jobs report,
with Dow Jones Industrial Average futures rising 22 points, or
0.1%, at 24,930, after they were trading decidedly lower.
S&P 500 index futures rose less than a point, or 0.1%, at
2,691.75. while Nasdaq-100 futures trading off 8.75 points, or
0.1%, at 6,817.
Check out:A death cross for the S&P 500 highlights a stock
market in tatters
(http://www.marketwatch.com/story/a-looming-death-cross-for-the-sp-500-highlights-a-stock-market-in-tatters-2018-12-06)
On Thursday, the Dow declined 79.40 points, or 0.3%, to
24,947.67, though the index was down by as many as 785 points at
its nadir. The S&P 500 index dropped 4.11 points, 0.2%, to
2,696.95, and the Nasdaq Composite Index fell 29.83 points, or
0.4%, to 7,188.26.
For the week, the Dow and S&P 500 are set to show declines
of 2.3%, while the Nasdaq has thus far declined 1.9%.
Read:The Dow just slashed a 785-point plunge, marking its most
stunning reversal since March
(http://www.marketwatch.com/story/the-dow-just-slashed-a-785-point-plunge-marking-its-most-stunning-reversal-since-march-2018-12-06)
The Thursday afternoon rebound put the Dow and the S&P back
into positive territory for 2018, while the Nasdaq built on its
gains to rise 4.1% for the year.
What's driving the market?
The U.S. economy added 155,000 new jobs in November
(http://www.marketwatch.com/story/us-gains-155000-jobs-in-november-and-unemployment-rate-stays-at-37-2018-12-07),
the Labor Department estimated Friday morning, below economists
expectations of 190,000 new jobs, per a MarketWatch poll of
economists.
The jobs report also showed the unemployment rate holding steady
at 3.7%, as expected. Average hourly earnings grew at 6 cents per
hour from October, or 0.2%, just shy of expectations, and grew by
3.1% year-over-year, their highest rate since 2009.
The jobs numbers are of particular importance to investors, as
these data will inform The Federal Reserve's interest-rate-setting
committee, the FOMC, as it prepares to decide whether to raise
interest rates at its coming meeting Dec. 18-19.
Signs that the FOMC may take a less aggressive tack in
normalizing rates have increased, with The Wall Street Journal on
Thursday reporting that Fed officials are considering a new
wait-and-see mentality
(https://www.wsj.com/articles/restrained-inflation-reduces-urgency-for-quarterly-rate-increase-pattern-1544127856?mod=searchresults&page=1&pos=1)
at that December meeting.
Expectations for a December interest-rate increase are showing a
76.6% probability, down from 83% a week ago, according to CME Group
data, with expectations increasing that policy makers may cool the
rate-hike path in 2019.
The jobs data come after a frenetic session that had been
colored by fears of intensifying trade battles between the U.S. and
China. That was after the arrest in Canada of a top Chinese tech
executive at China telecommunications giant Huawei Technologies,
which amplified worries in a market already skittish about
relations between Beijing and Washington on tariffs and
intellectual-property rights.
Read:Huawei arrest creates concerns in Silicon Valley as well as
abroad
(http://www.marketwatch.com/story/huawei-arrest-creates-concerns-in-silicon-valley-as-well-as-abroad-2018-12-06)
Those fears combined with a persistent drop in crude-oil prices
have made investors particularly on edge, fretting that global
economic growth is imperiled.
What are market participants saying
"The jobs report threaded the needle really well," J.J. Kinahan,
chief market strategist with TD Ameritrade told MarketWatch,
arguing that 150,000 new jobs is neither to high nor too low for
investors.
"Had the this come in really hot, the market would have
interpreted it as a number that would force the Fed to raise rates
not just in December, but in March too," he said. "You also didn't
want to miss in a huge way on the down side, as it would have
shaken faith in the economy," he said.
Which stocks are in focus?
Shares of Big Lots Inc.(BIG) are trading down more than 18%
before the bell Friday, after wider-than-expected third-quarter
loss.
Shares of Broadcom Inc. (AVGO) are in focus after the chip maker
announced fiscal fourth-quarter profits and sales Thursday evening
that topped Wall Street expectations. The stock is up 4.6% in
premarket action Friday.
Ulta Beauty Inc. (ULTA) shares are down 6% in premarket trade
Friday, after a Thursday evening earnings release that predicted
weaker holiday sales that analysts hoped.
Shares of Altria Group (MO)are in focus after the company
announced it would take a 45% ownership stake in the cannabis-firm
Cronos Group Inc. (CRON.T), worth $1.8 billion. The stock is up
2.5% in premarket action, while Cronos shares are surging more than
43% on the news.
What other data and Fed speakers are ahead?
How are other markets trading?
Asian markets traded mostly higher Friday
(http://www.marketwatch.com/story/asian-markets-inch-forward-amid-us-china-friction-2018-12-06),
with the Nikkei 225 rising 0.8% and markets in South Korea and
Australia advancing on the day. The Shanghai Composite Index was
virtually flat, with gains of less than 0.1%.
European markets were also trading higher Friday, with both the
Stoxx Europe 600 and the FTSE 100 in the green.
Crude oil is rising 4.3% Friday, while gold is advancing 0.4%
and the U.S. dollar is virtually unchanged.
(END) Dow Jones Newswires
December 07, 2018 09:22 ET (14:22 GMT)
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