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U.S. Stocks May See Initial Strength On Much Better Than Expected Jobs Data

wallstreet oct10 06dec19 lt

Following the lackluster performance seen in the previous session, stocks are likely to see initial strength during trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 143 points.

Early buying interest is likely to be generated in reaction to a closely watched Labor Department report showing much stronger than expected U.S. job growth in the month of November.

The report said non-farm payroll employment surged up by 266,000 jobs in November after climbing by an upwardly revised 156,000 jobs in October.

Economists had expected an increase of about 180,000 jobs compared to the addition of 128,000 jobs originally reported for the previous month.

The Labor Department said notable job gains occurred in healthcare and in professional and technical services, while manufacturing employment also rose as General Motors (GM) workers returned from a strike.

With the stronger than expected job growth, the unemployment rate edged down to 3.5 percent in November from 3.6 percent in October. The unemployment rate was expected to remain unchanged.

The markets may also benefit from continued optimism about a U.S.-China trade deal after U.S. President Donald Trump said trade talks are "moving along" and that the two sides are having "very major discussions."

Shortly after the start of trading, the University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of December. The consumer sentiment index is expected to slip to 96.5 in December after rising to 96.8 in November.

The Commerce Department is also due to release its report on wholesale inventories in the month of October. Wholesale inventories are expected to rise by 0.2 percent.

Late in the trading day, the Federal Reserve is scheduled to release its report on consumer credit in the month of October. Economists expect consumer credit to increase by $16.0 billion.

Following the rebound seen on Wednesday, stocks showed a lack of direction over the course of the trading day on Thursday. The major averages spent the day bouncing back and forth across the unchanged line.

Eventually, the major averages ended the day modestly higher. The Dow inched up 28.01 points or 0.1 percent to 27,677.79, the Nasdaq crept up 4.03 points or 0.1 percent to 8,570.70 and the S&P 500 rose 4.67 points or 0.2 percent to 3,117.43.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index surged up by 1.1 percent.

The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index has jumped by 1 percent, the French CAC 40 Index is up by 0.7 percent and the German DAX Index is up by 0.5 percent.

In commodities trading, crude oil futures are sliding $0.57 to $57.86 a barrel after closing unchanged at $58.43 a barrel on Thursday. Meanwhile, after rising $2.90 to $1,483.10 an ounce in the previous session, gold futures are slumping $9.50 to $1,473.60 an ounce.

On the currency front, the U.S. dollar is trading at 108.83 yen versus the 108.76 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1083 compared to yesterday's $1.1104.

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