Futures Edge Higher Following Stronger-Than-Expected Jobs Data

The major U.S. index futures are currently pointing to a modestly higher open on Friday, with stocks likely to move back to the upside following the pullback seen in the previous session.

The futures edged higher following the release of a closely watched Labor Department report showing employment in the U.S. surged by more than expected in the month of November.

The Labor Department said non-farm payroll employment shot up by 227,000 jobs in November after rising by an upwardly revised 36,000 jobs in October.

Economists had expected employment to jump by 200,000 jobs compared to the uptick of 12,000 jobs originally reported for the previous month.

Meanwhile, the report said the unemployment rate crept up to 4.2 percent in November from 4.1 percent in October. The modest increase matched economist estimates.

The data points to continued strength in the labor market but may offset recent optimism about the outlook for interest rates, keeping buying interest relatively subdued.

While the Federal Reserve is widely expected to lower interest rates by another 25 basis points later this month, the central bank is seen as increasingly likely to leave rates unchanged in January.

After climbing to new record highs during Wednesday’s session, stocks turned in a relatively lackluster performance during trading on Thursday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the day in negative territory. The Dow slid 248.33 points or 0.6 percent to 44,765.71, while the Nasdaq dipped 34.86 points or 0.2 percent to 19,700.26 and the S&P 500 edged down 11.38 points or 0.2 percent to 6,075.11.

The more notable pullback by the Dow came amid a steep drop by shares of UnitedHealth (UNH), with the health insurance giant tumbling by 5.2 percent following Wednesday’s fatal shooting of UnitedHealthcare CEO Brian Thompson.

Overall trading activity was somewhat subdued, however, as traders seemed reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report.

With the monthly jobs report looming, the Labor Department released a report showing a modest increase by first-time claims for U.S. unemployment benefits in the week ended November 30th.

The report said initial jobless claims rose to 224,000, an increase of 9,000 from the previous week’s revised level of 215,000.

Economists had expected jobless claims to inch up to 215,000 from the 213,000 originally reported for the previous week.

While most of the major sectors showed only modest moves on the day, semiconductor stocks moved sharply lower over the course of the session, dragging the Philadelphia Semiconductor Index down by 1.9 percent.

Notable weakness was also visible among computer hardware stocks, as reflected by the 1.2 percent loss posted by the NYSE Arca Computer Hardware Index.

Healthcare and housing stocks also moved to the downside on the day, while airline stocks surged, driving the NYSE Arca Airline Index up by 2.6 percent.

Commodity, Currency Markets

Crude oil futures are falling $0.61 to $67.69 a barrel after slipping $0.24 to $68.30 a barrel on Thursday. Meanwhile, after tumbling $27.80 to $2,648.40 an ounce in the previous session, gold futures are rising $12.10 to $2,660.50 an ounce.

On the currency front, the U.S. dollar is trading at 150.09 yen versus the 150.10 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0617 compared to yesterday’s $1.0586.

Asia

Asian stocks ended mixed on Friday, with Chinese and Hong Kong markets outperforming ahead of an annual economic policy meeting scheduled for next week.

A cautious undertone prevailed ahead of a U.S. jobs report due later in the day that might shift expectations for Federal Reserve interest rate cuts.

The dollar weakened, helping gold prices push higher in Asian trading. Oil drifted lower despite OPEC+’s decision to postpone the rollback of its oil production cuts.

China’s Shanghai Composite Index jumped 1.1 percent to 3,404.08 ahead of a key economic policy meeting next week, where China’s top leaders may discuss economic targets and additional stimulus plans for 2025. Hong Kong’s Hang Seng Index surged 1.6 percent to 19,865.85.

Japanese markets ended lower after data showed Japan’s local wages grew at the fastest pace in 32 years in October, increasing bets for a Bank of Japan rate hike.

The Nikkei 225 Index dropped 0.8 percent to 39,091.17, while the broader Topix Index settled 0.6 percent lower at 2,727.22.

Seoul stocks ended notably lower as the leader of President Yoon Suk Yeol’s own party backed impeachment, on which the National Assembly is set to vote on Saturday. The Kospi fell 0.6 percent to 2,428.16, logging a second weekly decline.

Chipmaker Samsung Electronics rose 0.7 percent and peer SK Hynix tumbled 3.4 percent, while battery maker LG Energy Solution rallied 2.2 percent.

Australian markets declined, with tech, telecom and energy stocks leading losses. The benchmark S&P/ASX 200 Index slid 0.6 percent to 8,420.90 as investors factored in a weaker economic outlook. The broader All Ordinaries Index closed down 0.6 percent at 8,689.30.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index dropped 0.7 percent to 12,809.59.

Europe

European stocks have moved mostly higher on Friday amid optimism that a new French budget could be passed within a matter of weeks.

French President Emmanuel Macron said he will appoint a new prime minister in the coming days and will get the 2025 budget adopted by parliament.

Meanwhile, German industrial output unexpectedly decreased in October on weak energy and auto production, official data revealed.

Industrial output registered a 1.0 percent decrease in October, data from Destatis showed, darkening the economic outlook. The decline confounded expectations for an increase of 1.0 percent. On a yearly basis, industrial production slid 4.5 percent.

Elsewhere, Halifax reported that Britain’s property sector gathered more pace in November, with house prices rising by a faster-than-expected 1.3 percent in November, the biggest increase this year.

On an annual basis, property prices were up 4.8 percent, the highest rate of growth since November 2022.

The European Central Bank (ECB) meets next Thursday for the last time in 2024 and economists overwhelmingly expect another 25 basis point rate cut, which would be the fourth such move this year.

The French CAC 40 Index is up by 1.5 percent and the German DAX Index is up by 0.3 percent, although the U.K.’s FTSE 100 Index is nearly unchanged.

In corporate news, Direct Line Insurance shares have surged in London. The Insurer said it would recommend a sweetened £3.61 billion takeover bid from Aviva, valuing the company at 275 pence per share.

On the other hand, homebuilder Berkeley Group has moved to the downside after reporting a decrease in half-year profits.

U.S. Economic News

Employment in the U.S. surged by more than expected in the month of November, according to a closely watched report released by the Labor Department on Friday.

The Labor Department said non-farm payroll employment shot up by 227,000 jobs in November after rising by an upwardly revised 36,000 jobs in October.

Economists had expected employment to jump by 200,000 jobs compared to the uptick of 12,000 jobs originally reported for the previous month.

Meanwhile, the report said the unemployment rate crept up to 4.2 percent in November from 4.1 percent in October. The modest increase matched economist estimates.

At 9:15 am ET, Federal Reserve Board Governor Michelle Bowman is scheduled to participate virtually in a discussion before the Missouri Bankers Association Executive Management Conference.

The University of Michigan is due to release its preliminary reading on consumer sentiment in the month of December at 10 am ET. The consumer sentiment index is expected to rise to 73.0 in December from 71.8 in November.

At 10:30 am ET, Chicago Federal Reserve President Austan Goolsbee is scheduled to participate in a moderated question-and-answer session before hybrid 38th Annual Economic Outlook Symposium.

Cleveland Federal Reserve President Beth Hammack is due to speak on the economic outlook before the City Club of Cleveland Friday Forum at 12 pm ET.

At 1 pm ET, San Francisco Federal Reserve President Mary Daly is scheduled to participate in an “Emerging Technology and the Economy” conversation hosted by the Hoover Institution.

The Federal Reserve is scheduled to release its report on consumer credit in the month of October at 3 pm ET. Consumer credit is expected to increase by $10.0 billion in October after rising by $6.0 billion in September.