Friday September 2nd


Dow futures rise as August jobs report comes in as expected

U.S. stock index futures rose on Friday, cutting losses for the week, as August’s jobs report came in about as expected, cooling fears that a much hotter labor market would give the Federal Reserve leeway to get more aggressive with interest rate hikes. Dow Jones Industrial Average futures jumped 155 points, or 0.6%. The S&P 500 rose 0.6% and the Nasdaq added 0.5% each. Investors were comforted by the highly anticipated jobs report, which showed the economy added 315,000 jobs for the month, just under the Dow Jones estimate for 318,000. Steve Sosnick, chief strategist at Interactive Brokers, called it a “Goldilocks” report. “This term applies here. Not too hot. Not too cold. It’s right around expectations. There’s nothing in here that takes 75 [basis points] off the table,” he said. “A number that is within expectations doesn’t change anything. What we’re seeing now is a relief rally.” The unemployment rate rose to 3.7%, two-tenths of a percentage point higher than expectations. The August report is particularly important because it’s one of the last major economic reports the Fed will weigh before it raises rates at its September meeting, and it could help the central bank determine whether a 75-basis-point hike, or more, is more appropriate than a 50-basis-point hike. The Dow and the S&P 500 ended the day higher in the prior session to kick of September, snapping four days of losses. Still, the major averages are set to end the week lower and notch their third negative week in a row, after slumping in the last days of August. The Dow is set to post a 1.9% decline, while the S&P and Nasdaq Composite are on track to fall by more than 2% each for the week. Stocks have been weighed down by hawkish comments from Federal Reserve officials signaling that interest rate hikes aren’t going away anytime soon. Now, traders are watching to see if stocks will retest the June lows, especially since September is historically a poor month for the market. Shares of retailer Lululemon jumped nearly 10% in premarket trading after reporting quarterly results that beat Wall Street’s expectations. Asia-Pacific shares were mixed on Friday as investors look ahead to the U.S. jobs report for August, a key indicator before the Federal Reserve’s next interest rate decision later this month. South Korea’s consumer price index rose slower than expected — 5.7% in August from the same period a year ago, less than the 6.1% predicted by analysts in a Reuters poll. The Nikkei 225 in Japan was almost flat at 27,650.84, while the Topix index was down 0.27% at 1,930.17. Hong Kong’s Hang Seng index slipped 0.66% in the final hour of trade and the Hang Seng Tech index dropped 1.28%. In Australia, the S&P/ASX 200 closed 0.25% down at 6,828.70. The Kospi in South Korea lost 0.26% to 2,409.41 and the Kosdaq declined 0.31% to 785.88. Mainland China’s Shanghai Composite rose fractionally to 3,186.48 and the Shenzhen Component was slightly lower at 11,702.39. Oil prices climbed on Friday on bets that OPEC+ will discuss output cuts at a meeting on Sept. 5, but the benchmarks were still on track to post their worst weekly drop in four on fears Covid-19 curbs in China and weak global growth will hit demand. Brent crude futures rose 1.8%, or $1.69, to $94.05 per barrel, while U.S. West Texas Intermediate (WTI) crude futures added 2%, or $1.72, to trade at $88.33 per barrel. Both benchmark contracts slid 3% in the previous session to two-week lows. Brent was headed for a weekly drop of nearly 8%, and WTI was on track to fall about 6% for the week. Gold rose above the important psychological level of $1,700 on Friday as the dollar paused while investors ingested key U.S. jobs data, amid expectations the Federal Reserve would continue with steep interest rate hikes in coming months. Spot gold rose 0.51% to $1,704.70 per ounce. The metal was down about 2% for the week so far, having touched a six-week low of $1,687.60 on Thursday. U.S. gold futures were up 0.39% to $1,715.90.