Friday July 8th


Stock futures dip as rates jump on a strong jobs report

U.S. stock index futures fell slightly on Friday as investors believe a stronger-than-expected jobs report will likely keep the Federal Reserve on track for its aggressive rate hikes. Futures tied to the Dow Jones Industrial Average fell 60 points5 while S&P 500 futures dipped about 0.2%. Nasdaq 100 futures slipped nearly 0.9%. Nonfarm payrolls increased 372,000 in the month of June, better than the 250,000 Dow Jones estimate and continuing what has been a strong year for job growth, according to data Friday from the Bureau of Labor Statistics. The action in futures followed a winning session Thursday in which the S&P 500 posted a four-day positive streak, matching its longest of the year thus far. The index is now down about 19% from its all-time high in January. “With the set up of a tough Fed on the basis of wanting to aggressively tame inflation with the comfort of a strong labor market ... today’s number is especially relevant,” Peter Boockvar, chief investment officer of Bleakley Financial Group, said in a note Friday morning. “If the unemployment rate starts to rise from here, I expect the Fed’s tough talk to be tempered in the months to come.” The S&P 500 is up about 2% during this holiday-shortened week, and it’s on pace for its second positive week in the last three. The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite are up 0.92% and 4.4% this week, respectively. Both indexes are also on track for their second positive week in the last three. Shares of Levi Strauss gained more than 3% in the premarket after the retailer reported quarterly earnings that exceeded expectations and boosted its dividend. GameStop fell about 6% in premarket trading as the company fired its chief financial officer and said it would lay off employees as part of a turnaround plan. The stock notched a 15% gain in the prior session after the video game retailer announced a 4-for-1 stock split. Energy stocks led gains during Thursday’s trading, as the price of oil reversed from a recent dip. Exxon Mobil climbed nearly 3.2%, while Occidental Petroleum added close to 4%. Chipmakers boosted the tech sector after strong earnings from Samsung. “You just don’t see the capitulation just yet, I think there’s a little bit more that needs to happen between now and the July Fed meeting,” Mark Newton, head of technical strategy at Fundstrat, said on CNBC’s “Closing Bell: Overtime” on Thursday. He added that stocks could pull back as early as Friday’s session. Japan’s stocks gave up most gains and the yen rose on Friday, on news that former Japanese Prime Minister Shinzo Abe was gravely injured in a shooting. The Nikkei 225 was up 0.1% and closed at 26,517.19, while the Topix index was 0.27% higher. Both indexes were more than 1% higher earlier in the session, before reports surfaced that Abe was shot while campaigning. Elsewhere in the region, Australia’s S&P/ASX 200 advanced 0.45% to close at 6,678. South Korea’s Kospi added 0.7% to 2,350.61, while the Kosdaq was 1.12% higher at 766.48. The Hang Seng index in Hong Kong was up 0.12% in the final hour of trade. Mainland China markets reversed course to close lower. The Shanghai Composite shed 0.25% to close at 3,356.08, while the Shenzhen Component lost 0.61% to 12,857.13. Oil prices slipped in early Asian trade on Friday, following a rebound in the previous session, as investors remained torn between worries over tight global supplies and fears a recession could dampen oil demand. Brent crude futures fell 23 cents to $104.42 per barrel, dropping away from a near 4% rebound on Thursday. U.S. West Texas Intermediate crude slipped 36 cents to $102.37, having settled 4.2% higher a day earlier. Both contracts are set to decline for a second week. Trade this week was marked by a sharp sell-off on Tuesday, where WTI slid 8% and Brent tumbled 9%. Brent’s $10.73 drop was the third biggest for the contract since it started trading in 1988. Gold prices steadied on Friday but were set for a fourth straight weekly drop, as the dollar resumed its rally while focus shifted to U.S. non-farm payroll print that could influence expectations of interest rate hikes. Spot gold was little changed at 1,740.31 per ounce by 7:14 a.m. ET. Bullion has lost nearly 4% so far this week, which would be its worst since mid-June last year. U.S. gold futures firmed at $1,739.90.