Monday March 7th

7-03-2016

Wall Street digests jobs numbers, waits for Fed speak

U.S. stock index futures pointed to a lower open on Monday, as oil prices bounced and investors waited for comment from the Federal Reserve, following a stronger-than-expected jobs report on Friday. Federal Reserve Vice Chair Stanley Fischer and Fed Governor Lael Brainard are both due to deliver speeches on Monday afternoon in Washington, which will be watched for any comment on the current state of the U.S. economy ahead of the Fed's next rate decision on March 16. "In spite of the positive surprise created by the strong U.S. payroll report published on Friday, the focus this week will be on the European Central Bank. Expectations of a rate hike at the March Federal Open Market Committee (FOMC) meeting were hardly changed after the release, rightly in our view, reflecting the fact that weakening economic conditions globally warrant at least a pause in the FOMC's tightening course," said rates strategist at Mizuho International, Antoine Bouvet. It should be a very quiet week for U.S. economic news, with just January consumer credit figures on Monday at 3:00 p.m. ET and wholesale inventory data Wednesday the only data releases of note in the first half of the week. Oil prices traded strongly on Monday, extending gains seen on Friday after the nonfarm payrolls report was released showing the economy created 242,000 jobs in February, topping expectations. Front-month Brent crude futures were trading around $39.25 per barrel early on Monday, up around 50 cents from Friday's close. That is almost a third above 2016 lows from mid-February, when prices hit levels not seen since 2003. U.S. West Texas Intermediate (WTI) futures were trading at $36.32 a barrel, up 40 cents from their last close and 40 percent above February lows. Earnings due for release include Black Stone Minerals, Shake Shack and Thor Industries. European markets traded lower Monday despite last Friday's solid U.S. jobs report as investors digested the latest economic targets from China and focus on the European Central Bank's (ECB) next meeting this week. In Asia, China announced new economic targets at the National People's Congress (NPC) over the weekend. China's new economic targets for 2016, released on Saturday at the National People's Congress (NPC) meeting, included a revised growth target of between 6.5 and 7 percent, a consumer price index growth target of around 3 percent and a budget deficit at 3 percent of gross domestic product (GDP), according to Reuters. apan's shares slid even as markets in Australia, South Korea and China gained on Monday as traders digested Friday's better-than-expected U.S. non-farm payroll and China's new economic targets announced at the National People's Congress (NPC) over the weekend. The Japanese benchmark Nikkei 225 closed down 103.46 points, or 0.61 percent, at 16,911.32, while the Topix fell 13.45 points, or 0.98 percent, to 1,361.90. Across the Korean Strait, the Kospi finished up 2.24 points, or 0.11 percent, at 1,957.87. Hong Kong's Hang Seng index closed near flat at 20,159.72 points, after wavering between gains and losses throughout the session. Chinese markets were higher, with the Shanghai composite closing up 24.49 points, or 0.85 percent, at 2,898.64, while the Shenzhen composite added 34.67 points, or 2.03 percent, to 1,741.64. Brent crude hit a three-month high on Monday, extending gains that have lifted crude benchmarks by more than a third from this year's lows on an improving global outlook and stronger sentiment for a market recovery. Front-month Brent crude futures traded as high as $39.50, the highest since early December. They rose 55 cents $39.27 a barrel at 8:31 a.m. EDT (1331 GMT). In January, prices fell to levels not seen since 2003. U.S. West Texas Intermediate (WTI) futures fetched $36.44 a barrel, up 52 cents. They rose as high as $36.72 in early trade. The May WTI contract settled on Friday at $35.92 a barrel, up 3.91 percent. Gold rose on Monday, hovering just below last week's 13-month high as European shares dipped, while a fall in average U.S. earnings lessened expectations the Federal Reserve could raise interest rates at its next policy meeting. Spot gold was up 0.75 percent at $1,268.61 an ounce. The metal peaked at $1,279.60 on Friday, its strongest since Feb. 3, 2015, before slipping on U.S. data. U.S. gold for April delivery was $1.20 lower at $1,269.50.