Futures Pull Back Sharply Following Much Stronger Than Expected Jobs Data

After seeing some strength earlier this morning, the major U.S. stock index futures have pulled back sharply following the release of a Labor Department report showing U.S. employment surged by much more than expected in the month of September.

The Labor Department said non-farm payroll employment shot up by 336,000 jobs in September after jumping by an upwardly revised 227,000 jobs in August.

Economists had expected employment to increase by 170,000 jobs compared to the addition of 187,000 jobs originally reported for the previous month.

Meanwhile, the report said the unemployment rate in September came in unchanged from August at 3.8 percent. The unemployment rate was expected to edge down to 3.7 percent.

The report has triggered a spike by treasury yields amid renewed concerns about the outlook for interest rates, with yields once again soaring to their highest levels in over sixteen years.

While the data paints a positive picture of the economy, the Federal Reserve has warned about the impact of labor market tightness.

Investors were already worried about the prospect of further interest rates hikes, and the data is likely to add to their concerns.

Stocks came under pressure early in the session on Thursday but staged a notable recovery attempt over the course of the trading day. The major averages peeked above the unchanged line late in the session but closed modestly lower.

After falling by nearly 190 points in early trading, the Dow ended the day down just 9.98 points or less than a tenth of a percent at 33,119.57. The Nasdaq edged down 16.18 points or 0.1 percent to 13,219.83, while the S&P 500 slipped 5.56 points or 0.1 percent to 4,258.19.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index fell by 0.3 percent, while Hong Kong’s Hang Seng Index surged by 1.6 percent.

Meanwhile, the major European markets have given back ground following the U.S. jobs report but remain modestly higher. While the U.K.’s FTSE 100 Index is up by 0.1 percent, the French CAC 40 Index and the German DAX Index are both up by 0.2 percent.

In commodities trading, crude oil futures are sliding $0.62 to $81.69 a barrel after tumbling $1.91 to $82.31 a barrel on Thursday. Meanwhile, after edging down $3 to $1,831.80 an ounce in the previous session, gold futures are slipping $6.30 to $1,825.50 an ounce.

On the currency front, the U.S. dollar is trading at 149.35 yen versus the 148.51 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0513 compared to yesterday’s $1.0550.

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