Stocks May Open Roughly Flat Following Jobs Data – U.S. Commentary

With traders digesting the closely watched monthly jobs data, stocks may show a lack of direction in early trading on Friday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 9 points.

The Labor Department recently released a report showing weaker than expected job growth in the month of July due in part to a drop in government employment and the closing of Toys “R” Us stores.

The report said non-farm payroll employment climbed by 157,000 jobs in July compared to economist estimates for a jump of about 190,000 jobs.

However, the report also showed upward revisions to the increases in employment in May and June, which surged up by 268,000 jobs and 248,000 jobs, respectively.

With the upward revisions, employment gains in May and June combined were 59,000 more than previously reported.

The report also showed a modest decrease in the unemployment rate, which edged down to 3.9 percent in July from 4.0 percent in June. The drop matched economist estimates.

Meanwhile, the Labor Department said the annual rate of average hourly employee earnings growth was unchanged from the previous month at 2.7 percent.

A separate report from the Commerce Department showed the U.S. trade deficit widened in the month of June amid an increase in imports and a decrease in exports.

The report said the trade deficit widened to $46.3 billion in June from a revised $43.2 billion in May. The deficit had been expected to widen to $46.5 billion from the $43.1 billion originally reported for the previous month.

Not long after the open, the Institute for Supply Management is scheduled to release its report on activity in the service sector in the month of July.

The ISM’s non-manufacturing index is expected to edge down to 58.6 in June from 59.1 in July, although a reading above 50 would still indicate growth in the service sector.

An historic milestone for Apple (AAPL) contributed to a substantial advance by the tech-heavy Nasdaq during trading on Thursday, while renewed trade war concerns weighed on some of the other Dow components.

The major averages subsequently ended the day mixed. While the Dow edged down 7.66 points or less than a tenth of a percent to 25,326.16, the Nasdaq jumped 95.40 points or 1.2 percent to 7,802.69 and the S&P 500 climbed 13.86 points or 0.5 percent to 2,827.22.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while Hong Kong’s Hang Seng Index dipped by 0.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has advanced by 0.8 percent, the German DAX Index is up by 0.5 percent and the French CAC 40 Index is up by 0.3 percent.

In commodities trading, crude oil futures are slipping $0.01 to $68.95 a barrel after jumping $1.30 to $68.96 a barrel on Thursday. Meanwhile, after falling $7.50 to $1,220.10 an ounce in the previous session, gold futures are rising $3.70 to $1,223.80 an ounce.

On the currency front, the U.S. dollar is trading at 111.40 yen compared to the 111.66 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1605 compared to yesterday’s $1.1585.

by RTTNews Staff Writer

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