Friday June 4th

4-06-2021

U.S. stock futures rise after solid job gains in May

U.S. stock index futures gained slightly on Friday as the key May jobs report showed solid gains, boosting confidence in the economic comeback. S&P 500 futures rose 0.4%. Dow Jones Industrial Average futures erased earlier losses and rose 80 points. Nasdaq 100 futures were 0.5% higher. The U.S. economy added 559,000 jobs in May, the Labor Department said on Friday. The number came in slightly lower than an estimate of 671,000 from economists surveyed by Dow Jones, but still showed a healthy rebound in the labor market as it’s up from a disappointing 266,000 payrolls added in April. The unemployment rate fell to 5.8% from 6.1%, which was better than the estimate of 5.9%. Many believe the jobs report, while solid, is not strong enough to trigger the Federal Reserve to dial back its bond buying program. The jobs number is “goldilocks for risk,” said John Briggs, head of strategy at NatWest Markets. It’s “not too hot to bring in the fed and not too cold to worry about the economy.” The 10-year Treasury yield dipped slightly following the jobs report. Bond yields had jumped higher in recent months amid rising inflation expectations. The S&P 500 is sitting just 1% from its all-time high reached last month. The equity benchmark has lost about 0.3% this week through Thursday. Meme stocks continued their wild prices swings on Thursday, especially AMC Entertainment. The movie theater operator said Thursday morning it was going to sell 11.5 million shares only to announce several hours later it already completed its stock offering, raising $587.4 million in additional capital. AMC was down another 7% in premarket trading Friday after shedding 18% in the previous session. BlackBerry also traded lower in premarket, but shares are still up more than 50% on the week. Facebook shares fell slightly in premarket trading after the company was hit with new antitrust investigations from the U.K. and EU. Shares in Asia-Pacific were mixed on Friday, as the Reserve Bank of India held steady on interest rates. Hong Kong’s Hang Seng index closed 0.17% lower at 28,918.10. In mainland China, the Shanghai composite rose 0.21% on the day to 3,591.84 while the Shenzhen component gained 0.744% to close at 14,870.91. In Japan, the Nikkei 225 fell 0.4% to close at 28,941.52 while the Topix index finished the trading day fractionally higher at 1,959.19. South Korea’s Kospi closed 0.23% lower at 3,240.08. Oil rose towards $72 a barrel on Friday, trading close to a two-year high as OPEC+ supply discipline and recovering demand countered concerns about patchy COVID-19 vaccination rollout around the globe. The Organization of the Petroleum Exporting Countries (OPEC) and allies on Tuesday said they would stick to agreed supply restraints. A weekly supply report on Thursday showed U.S. crude inventories dropped more than expected last week. Brent crude rose 21 cents, or 0.3%, to $71.52 a barrel. It reached an intra-day high of $71.99 on Thursday, the highest since May 2019. U.S. West Texas Intermediate crude was up 26 cents, or 0.4%, at $69.07. Gold was set for its biggest weekly decline since March on Friday, pressured by a firm dollar and upbeat U.S. data that pointed to a strengthening labor market, raising expectations for strong nonfarm payrolls data. Spot gold was little changed at $1,870.07 per ounce by 1118 GMT, after hitting its lowest since May 19 at $1,855.59 earlier in the session. U.S. gold futures traded 0.1% lower at $1,871.10 per ounce.