Opening Comment — Friday, June 07, 2024
DJIA: 38,886.17, up 78.84
S&P 500: 5,352.96, down 1.07
NASDAQ: 17,173.12, down 14.78
Stocks lower ahead of May jobs report
Stock futures are mostly lower on Friday, as investors await the release of the May jobs report and the final reading for April’s wholesale inventories. The Dow and the S&P 500 are both falling 0.1%. The Nasdaq 100 is little changed relative to fair value on the GLOBEX.
U.S. equities were mixed on Thursday, with the final reading for the first quarter’s non-farm productivity, which was only revised slightly down to weaker growth, compared to the expected stagnation. April’s trade deficit widened less than projections. The Dow was up 0.2%, while the tech-heavy Nasdaq Composite fell 0.1%. The S&P 500 was little changed with eight of 11 sectors finishing in positive territory. The Consumer Discretionary sector gained the most, rising 1.0%.
On the data front today, non-farm payrolls are expected to increase by 180,000 month-over-month (MoM) in May, up from the prior month’s increase of 175,000, while May’s manufacturing payrolls are projected to increase by 5,000 MoM versus the prior month’s rise of 8,000. Meanwhile, private payrolls are anticipated to increase by 165,000 MoM versus the prior month’s increase of 167,000. The unemployment rate is expected to register 3.9% for May, unchanged from the prior month’s reading, while May’s labor force participation rate is expected to be 62.7%, also unchanged from the prior month’s reading. May’s average hourly earnings is expected to increase 0.3% MoM and 3.9% year-over-year (YoY), up from the prior month’s increases of 0.2% and unchanged, respectively. The final reading for April’s wholesale inventories is expected to show an increase of 0.2% MoM, unchanged from the prior reading. April’s consumer credit is projected to record an increase of $10.0 billion versus the prior month’s increase of $6.3 billion.
Across the pond, European stocks are lower in mid-day trading as investors digested the European Central Bank’s (ECB’s) commentary following their expected decision to cut interest rate at their policy meeting for the first time since 2019. Germany’s industrial production unexpectedly declined in April.
Overnight in Asia, stocks were mixed with the Reserve Bank of India (RBI) deciding to hold interest rates steady. The initial reading for Japan’s Leading Index for April came in line with expectations, slightly down from March’s downward revision. China’s trade surplus widened in May, compared to an expected narrowing, with the country’s exports increasing more than expectations, while imports increased less than consensus estimates.
In FOREX trading, the dollar is little changed ahead of the U.S.’s May jobs report.
Over in the commodity pits, West Texas Intermediate (WTI) crude oil is 0.3% higher at $75.79/barrel after OPEC+ (Organization of the Petroleum Exporting Countries and 11 other non-OPEC members) signaled they might halt or reverse voluntary output increases as needed.
In the metals complex, gold is 1.5% lower at $2334.90/ounce.