Friday July 8th

8-07-2016

Dow futures add 100 points after huge jobs beat

U.S. stock index futures extended gains Friday after the June non-farm payrolls report exceeded expectations with a headline figure of 287,000. "This is really good news. It's not going to change monetary policy in the near term because we're still unraveling the effects of the (EU) referendum," said Art Hogan, chief market strategist at Wunderlich Securities. Dow futures added more than 100 points. The U.S. dollar index reversed losses to trade a quarter of a percent higher. The euro was near $1.102 and the yen was near 100.9 yen versus the greenback as of 8:41 a.m. ET. Treasury yields rose, with the 10-year yield around 1.41 percent and the 2-year yield near 0.63 percent. The 30-year yield was around 2.15 percent. The jobs report "says we ended the quarter strong and the earnings probably intact," Hogan said, noting the upcoming earnings reporting season probably marks an inflection point in profit growth. Friday's June employment report was expected to show a rebound to 175,000 nonfarm payrolls, from May's stunningly weak 38,000, according to Thomson Reuters. The jobs data is especially key since the shock slowdown in May hiring was one reason the Federal Reserve cited for leaving interest rates unchanged at its meeting last month. U.S. stocks closed mixed Thursday as sharp declines in oil prices weighed. New private sector jobs data - often used as a gauge for the nonfarm payrolls figure - saw a rise by 172,000 in June, versus consensus expectations of 159,000, according to a report Thursday from ADP and Moody's. Consumer credit is due at 3.00 p.m. ET. In Europe on Friday, stocks reversed early losses to trade slightly higher with bank stocks outperforming ahead of U.S. jobs data. Asian markets were mostly lower overnight, amid lower oil prices and caution ahead of the all-important U.S. data. The S&P/ASX 200 ended flat after wavering between negative and positive, boosted by its materials subindex. In Japan, the Nikkei 225 was down 1.1 percent after opening up above 0.7 percent; while across the Korean strait, the Kospi was dipped 0.56 percent. Chinese mainland markets were mixed, with the Shanghai composite down 1 percent and the Shenzhen composite flat. In Hong Kong, the Hang Seng index fell 1 percent. Crude prices bounced back on Friday from two-month lows hit in the previous session, mostly holding gains as the dollar spiked after monthly data showed U.S. job creation far surpassed expectations. The dollar rallied following the report, making greenback denominated crude oil more expensive to holders of other currencies. Brent crude futures were trading at $46.79 per barrel at 8:34 a.m. ET (1234 GMT) on Friday, up 39 cents, or 0.8 percent, from their last settlement. U.S. crude was up 40 cents, or 0.8 percent, at $45.54 a barrel. Still, Brent and U.S. crude were heading for weekly losses of roughly 7 percent, their deepest declines since January and February respectively. Gold futures traded about 1 percent lower Friday after the June jobs report easily beat expectations. U.S. gold futures for August delivery were down $16.70, at $1,345.70 per ounce. Spot gold was trading down 1 percent at $1,344.06 an ounce.