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Futures Move To The Downside Following Strong Jobs Data

wallstreet sep4 05aug22 lt

Following the mixed performance seen in the previous session, stocks are likely to come under pressure in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.8 percent.

The futures showed a notable move to the downside following the release of the Labor Department's closely watched monthly jobs report.

The report showed employment in the U.S. jumped by much more than expected in the month of July, leading to concerns about the outlook for interest rates.

The report showed non-farm payroll employment spiked by 528,000 jobs in July after surging by an upwardly revised 398,000 jobs in June.

Economists had expected employment to climb by about 250,000 jobs compared to the addition of 372,000 jobs originally reported for the previous month.

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

While the data paints a positive picture of the labor market, the report may also give the Federal Reserve confidence they can continue aggressively raising interest rates without causing a recession.

The stronger than expected jobs report is likely to increase expectations that the Fed will raise rates by another 75 basis points at the next meeting in September.

Later in the day, the Fed is scheduled to release its report on consumer credit in the month of June. Consumer credit is expected to increase by $24.0 billion.

Stocks turned in a relatively lackluster performance during trading on Thursday, with the major averages bouncing back and forth across the unchanged line following the rally seen on Wednesday. Despite the choppy trading, the tech-heavy Nasdaq reached a new three-month closing high.

The major averages eventually finished the session mixed. While the Nasdaq rose 52.42 points or 0.4 percent to 12,720.58, the S&P 500 edged down 3.23 points or 0.1 percent to 4,151.94 and the Dow dipped 85.68 points or 0.3 percent to 32,726.82.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index advanced by 0.9 percent, while China's Shanghai Composite Index jumped by 1.2 percent.

Meanwhile, the major European markets have moved to the downside following the U.S. jobs report. While the French CAC 40 Index has slid by 0.8 percent, the U.K.'s FTSE 100 Index and the German DAX Index are down by 0.3 percent and 0.2 percent, respectively.

In commodities trading, crude oil futures are rising $0.51 to $89.05 a barrel after tumbling $2.12 to $88.54 a barrel on Thursday. Meanwhile, after surging $30.50 to $1,806.90 an ounce in the previous session, gold futures are falling $16.20 to $1,790.70 an ounce.

On the currency front, the U.S. dollar is trading at 134.35 yen versus the 132.89 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0177 compared to yesterday's $1.0246.

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