Friday January 10th

10-01-2020

Dow futures turn negative after disappointing December jobs report

U.S. stock index futures pared earlier gains on Friday after the release of disappointing U.S. employment data. Around 8:45 a.m. ET, Dow Jones Industrial Average futures turned negative and indicated a flat open. Earlier in the day, they pointed to a Dow open above 29,000 for the first time. S&P 500 and Nasdaq 100 futures were also off their earlier highs, indicating slight gains at the open. The U.S. economy added 145,000 jobs in December. Economists polled by Dow Jones expect the U.S. economy to have added 160,000 jobs in December. Wages also disappointed, growing by just 2.9% on a year-over-year basis. Economists had forecast a gain of 3.1%. December was also the first month since July 2018 that wages grew by less than 3% from the year before. The weaker-than-expected data propped up safe havens such as Treasurys and gold. The benchmark 10-year yield fell to 1.83% from around 1.86%. Gold futures, meanwhile, rose to trade marginally higher. Stocks hit record highs on Thursday as tensions between Iran and the U.S. decreased. The move higher put the major averages on track for solid weekly gains after a volatile week of trading. Through Thursday’s close, the S&P 500 was up 1.2% for the week. The Dow and Nasdaq had risen 1.1% and 2%, respectively in that time period. Major Asian markets were mostly in positive territory on Friday afternoon following the easing of U.S.-Iran tensions, and after U.S. stocks shot to new highs overnight. In Japan, the Nikkei 225 rose 0.47% to close at 23,850.57, while the Topix was up 0.35% to 1,735.16. Over in South Korea, the Kospi jumped 0.91% to close at 2,206.39. Mainland Chinese markets bucked the upward trend. The Shanghai composite inched down to close at 3,092.29, while the Shenzhen composite fell 0.18% to 1,797.35 and the Shenzhen component dropped 0.17% to 10,879.84. Hong Kong’s Hang Seng index, however, climbed 0.19% in its final hour of trade. Oil edged further above $65 a barrel on Friday as concerns about a possible renewed spike in Middle East tensions outweighed rising U.S. inventories and other signs of ample supply. Brent crude, the global benchmark, was up 24 cents at $65.61 by 1155 GMT, and was heading for its first weekly decline in six weeks, down over 4%. U.S. West Texas Intermediate crude added 11 cents to $59.67. Brent is still below where it was before the U.S. drone strike killed Iranian general Qassem Soleimani on Jan. 3. Gold turned positive on Friday following a disappoint U.S. jobs report, after being on track for its first weekly decline in five as easing tensions in the Middle East rekindled appetite for higher risk assets. Spot gold rose 0.1% at $1,554.90 per ounce, having fallen as much as 1% on Thursday to its lowest since Jan. 3 at $1,539.78. U.S. gold futures were 0.1% higher at $1,555.1 per ounce.