Friday January 8th

8-01-2016

Dow futures briefly add 200 after jobs report

U.S. stock index futures indicated a higher open on Friday after the jobs report showed creation of 292,000 jobs. Dow futures briefly traded more than 220 points higher after the December employment report, which showed the unemployment rate at 5.0 percent. Average hourly earnings declined one cent, for an annualized gain of 2.5 percent, mostly because wages were unusually weak in December 2014, Reuters said. Treasury yields held higher, with the 2-year yield at 0.98 percent and the 10-year yield at 2.18 percent. The U.S. dollar index traded nearly 1 percent higher against major world currencies, with the euro near $1.08 and the yen at 118.56 yen against the greenback, as of 8:37 a.m. ET. Dow futures were up about 140 points ahead of the report, helped by recovery in global markets overnight. The Shanghai Composite closed 1.98 percent higher on Friday, one day after a seven percent stock drop triggered a circuit breaker and forced Chinese markets to close early for the second time in a week. The People's Bank of China said Friday it would further liberalize interest rates. The central bank also said it would make the yuan more international, keep the currency basically stable, further improve the currency formation mechanism and deepen reforms of the foreign exchange management system and financial institutions. Japan's Nikkei 225 was flat in late afternoon trade before slipping to close down 69.38 points, or 0.39 percent, at 17,697.96. Expectations for Federal Reserve rate hikes in 2016 rose Friday after the jobs report. Two more employment reports and other data are due before the central bank is next expected to consider another rate rise, in March. Friday will also see wholesale trade released at 10:00 a.m., with consumer credit due at 3:00 p.m. In Europe, the pan European Stoxx 600 index was around 0.45 percent higher on Friday morning. U.S. stocks are sharply lower on the week, with the Dow Jones industrial average and S&P 500 posting their worst first four days of a year in history as of Thursday's close. Oil prices rose modestly on Friday, still within reach of 11 and a half-year lows, boosted by a recovery in Chinese shares, but persistent global oversupply and a bleak demand outlook capped gains. Oil prices plunged to 12-year lows on Thursday after leading energy consumer China allowed its yuan currency to slip, sending stock markets tumbling globally. Beijing then suspended equities trading as the sharp falls triggered the circuit-breaking mechanism for a second time since its introduction this week. Brent rose 27 cents to $34.02 a barrel, near a low of $34.18 reached in July 2004. U.S. West Texas Intermediate (WTI) was up 21 cents at $33.48 a barrel. Gold prices fell 1 percent on Friday, retreating from the previous day's nine-week high as stock markets rebounded after this week's rout and the dollar strengthened. Spot gold peaked earlier on Friday at $1,112 but quickly pared gains. It was down 1.12 percent at $1,096.90 an ounce, while U.S. gold futures for February delivery were down $10.50 an ounce at $1,099.50.