Friday December 7th

7-12-2018

Stock futures turn positive after weak jobs report eases concern about an aggressive Fed

U.S. stock futures recovered earlier losses on Friday after the release of weaker-than-expected employment data alleviated some worries about the Federal Reserve's pace of rate increases. At around 8:42 a.m. ET, Dow Jones Industrial Average futures were up 59 points, indicating a marginal gains at the open. Dow futures pointed to a drop of more than 200 points earlier. Futures on the S&P 500 and Nasdaq 100 also pointed to losses at the open. The U.S. economy added 155,000 jobs in November. Economists polled by Dow Jones forecast the U.S. economy to have  added 198,000 jobs last month. Average hourly earnings also fell short of expectations. Friday's moves come after stocks rebounded from sharp losses on Thursday on media reports that the Fed could tighten monetary policy at a slower-than-expected pace. Earlier, the session saw deep falls on the back of concerns regarding U.S.-China relations. The Wall Street Journal reported the central bank is considering whether to signal a wait-and-see approach to rate hikes at its upcoming meeting this month. The report said Fed officials do not know what their next move on rates will be after December. As a result, The Dow closed 79.40 points lower at 24,947.67 after plunging nearly 800 points earlier in the day. Stocks initially fell on Thursday on worries about the U.S. and China striking a permanent deal on trade after news of the Huawei CFO's arrest broke. The arrest was made on Dec. 1. Shares in Asia were mostly higher on Friday on the back of a report suggesting the U.S. Federal Reserve could consider a slower tempo of increasing interest rates than had been previously expected. The hard-hit mainland Chinese markets ended the trading day mostly unchanged, with both the Shanghai composite and the Shenzhen composite largely flat at around 2,605.89 and about 1,350.70, respectively. Meanwhile, the Hang Seng index in Hong Kong traded down by around 0.1 percent as of its final hour of trade. Japan's Nikkei 225 rose 0.82 percent to close at 21,678.68 while the Topix index gained 0.61 percent to finish the trading week at 1,620.45. Over in South Korea, the Kospi gained 0.34 percent to close at 2,075.76. Oil prices rose on Friday morning on signs that OPEC and a group of allied producers are nearing a deal to cut output and boost the market. OPEC is holding talks with other oil-producing nations including Russia at its headquarters in Vienna, Austria. The 15-member producer group was targeting a cut of roughly 800,000 barrels per day, Reuters reported. The talks had earlier hit an impasse because Saudi Arabia refused to agree to an exemption for Iran, OPEC sources told Reuters. However, Iran appeared to accept a deal by Friday afternoon in Vienna, though delegates said the group was still negotiating the wording of its official statement. Energy Aspects says communicating a deal properly is imperative because the market is fragile right now. The energy research firm warns that a "jumbled statement referring to some broad intention to prevent the market from being oversupplied will undoubtedly trigger a further sell-off in prices." Brent crude, the international benchmark for oil prices, rose $2.78, or 2.6 percent, to $62.84 a barrel by 8:47 a.m. ET (1347 GMT). U.S. West Texas Intermediate crude futures were up $2.17, or 4.2 percent, at $53.66 per barrel. Gold prices rose to their highest level since July on Friday after the release of weaker-than-expected eased concern about the Federal Reserve aggressively raising rates in the future. Futures for February delivery spiked to a high of $1,251.40 per ounce, their highest level since July 7. Spot gold was up 0.3 percent at $1,241.41 per ounce, having hit $1,244.32 per ounce in the previous session, its highest since July 17. With a rise of nearly 1.5 percent this week, gold looked set to clock its best gain since the week of Aug. 24.