Friday February 1st

1-02-2019

Dow futures indicate a 100-point gain on the back of a booming jobs report

U.S. stock index futures pointed to a higher open on Friday after the U.S. government released jobs growth data that easily beat expectations. Dow futures traded 80 points higher, indicating a gain of 100.33 points at the open. The U.S. economy added 304,000 jobs in January. Economists polled by Refinitiv expect the U.S. economy to have added 170,000 jobs in January. The report follows a 35-day U.S. government shutdown. It also marks the 100th straight month of jobs growth. Investors had been awaiting the report in search of clues about the state of the economy. Wall Street also digested key earnings from companies like Amazon and Merck. On Thursday, Amazon reported better-than-expected earnings and revenue for the fourth quarter. However, the company issued weaker-than-expected revenue guidance for the first quarter and warned about increasing investments. These concerns pushed Amazon shares down by 4.3 percent. Merck, meanwhile, posted a better-than-expected profit and revenue, but its shares fell 0.6 percent before the bell. Exxon Mobil shares rose about 3 percent after the company reported better-than-expected earnings. Money managers are also keeping an eye on trade talks between China and the United States. Both negotiating teams have said they made “important progress.” President Donald Trump also said he would soon meet with Chinese premier Xi Jinping to try to reach a comprehensive trade deal. Stocks had taken heart from the possibility of top-level trade talks over the coming weeks, but the upbeat mood soon cooled when the White House insisted it sees March 1 as a hard deadline for a deal. Earlier on Friday, a survey showed Chinese factory activity falling to its lowest level since February 2016. The downbeat data exacerbated fears of an economic slowdown. The moves Friday come after Wall Street posted its biggest January gain since 1987 in the previous session. Strong earnings and an indication from the Federal Reserve that it will pause rate hikes boosted investor confidence. The S&P 500 ended January up more than 7 percent. Gains in January usually translate into a positive year for stocks. Since 1950, the S&P 500 has ended a calendar year higher 87 percent of the time when January ends up being a positive month, according to the Stock Trader’s Almanac. Stocks in China saw strong gains on the first trading day of February as hopes rise for a U.S.-China trade deal. However, the country’s manufacturing data came in below expectations. Mainland Chinese markets saw gains on the day, as the Shanghai composite rose 1.3 percent to close at around 2,618.23 while the Shenzhen component jumped 2.738 percent to finish its trading day at about 7,684.00. The Shenzhen composite also climbed higher by 2.765 percent to close at approximately 1,309.99. Hong Kong’s Hang Seng index slipped 0.23 percent, in the final hour of trade. Elsewhere in Asia, the mood appeared more cautious. Japan’s Nikkei 225 closed slightly higher at 20,788.39 while the Topix index shed 0.18 percent to finish its trading day at 1,564.63. South Korea’s Kospi closed slightly lower at 2,203.46. Oil prices were little changed on Friday as hopes the United States and China could soon settle their trade disputes offset data from China that stoked concerns over an economic slowdown that could dent demand for fuel. International Brent crude oil futures were up 8 cents at $60.92 per barrel around 7:55 a.m. ET (1255 GMT). U.S. West Texas Intermediate (WTI) futures were down 7 cents at $53.72 per barrel. Gold gained slightly on Friday as a pause in U.S. interest rate hikes kept bullion on track for a second weekly increase. Gold fell earlier in the session as investors sought riskier assets amid optimism the United States and China may reach a trade deal. Spot gold gained 0.05 percent to $1,321.59 per ounce at 8:44 a.m. ET. Prices rose to $1,326.30, their highest since April 26, on Thursday and are set to gain 1.1 percent for the week. U.S. gold futures were up 0.07 percent at $1,326.10 per ounce.