Friday June 3rd

3-06-2016

Futures turn lower after big jobs miss

U.S. stock-index futures pointed to a lower open Friday after the May jobs report showed creation of 38,000 jobs, well below expectations. Futures had pointed to a flat to slightly higher open ahead of the report and turned to trade slightly lower after the report. Dow futures were last trading about 60 points lower. The U.S. dollar index reversed to trade more than 0.8 percent lower. Treasury yields fell, with the 2-year yield last near 0.8 percent and the 10-year yield around 1.74 percent. Headline unemployment was 4.7 percent. The labor force participation rate was 62.6 percent. Average hourly earnings rose 0.2 percent. The Commerce Department says the trade deficit increased 5.3 percent in April to $37.4 billion, up from an imbalance of $35.5 billion in March, according to the Associated Press. Exports increased 1.5 percent to $182.8 billion but imports rose faster, increasing 2.1 percent to $220.2 billion. In other economic news, ISM non-manufacturing data and factory orders are set to be released at 10:00 a.m. In an interview with CNBC before the jobs data release, Chicago Fed President Charles Evans said that the timing of a rate hike was "not really that important." "Two rate hikes in 2016, that's my own call for that, if the data continue to be in line with my outlook, that's a slow and gradual increase this year," said Evans, an alternate member of the Federal Open Market Committee. "Timing's not really that critical for my viewpoint, as long as by the end of this year we're at just a little under 1 percent," Evans added. Fed Governor Lael Brainard is set to give a speech on economic outlook and monetary policy at 12:30 p.m. ET. The pan European Stoxx 600 Index was up 0.6 percent on Friday. Asian markets were mostly higher Friday as markets awaited key U.S. jobs data, which will offer a key indicator of whether the Federal Reserve will pull the trigger in June. The Japanese yen was also on investors' radar after the dollar-yen fell below 109 Thursday. Despite the stronger yen, the Nikkei 225 closed up 0.48 percent, or 79.68 points at 16,642.23, breaking its two-day losing streak. The dollar-yen currency pair was trading at 108.75 at 2:27 p.m. HK/SIN time. Mainland Chinese markets erased early gains after the private Caixin Markit services purchasing managers' index (PMI) for May fell to 51.2 from 51.8 in April. Readings above 50 indicate an expansion on a monthly basis. The survey showed that new business and hiring in China's private sector slowed to a three-month low. The Shanghai composite finished up 0.44 percent, or 12.949 points at 2,938.178 and the Shenzhen composite closed up 0.529 percent, or 10.07 points at 1,914.81. Oil prices moved in and out of positive territory on Friday after the May jobs report showed the United States added 100,000 fewer jobs than analysts expected. The dollar index turned sharply lower following the news. A weaker greenback makes crude oil more affordable to holders of other currencies and incentivizes buying. Brent crude futures briefly turned positive on Friday before falling back to $50.01 per barrel at 8:59 a.m. ET (1259 GMT), down 3 cents. U.S. West Texas Intermediate (WTI) crude futures were trading down 4 cents at $49.13. Gold prices soared Friday after the May U.S. jobs report came in much lighter than expected. Spot gold traded 1.75 percent higher after the report's release, at $1,231.50. Gold futures for August delivery rose $21.20 to $1,233.90 an ounce.