The major U.S. index futures are signaling an upward start to the Friday trading session, suggesting a rebound in stock prices following two days of stagnation. This positive trajectory gains further momentum after the release of a Labor Department report, which unveiled a notable surge in job creation for September, exceeding expectations.
According to the Labor Department, non-farm payrolls rose by 254,000 in September, a significant increase from the revised August figure of 159,000. This far surpasses the anticipated growth of 140,000 jobs and the previously reported 142,000 for August. The unemployment rate also dipped slightly to 4.1% in September from 4.2% in August, defying predictions of it remaining constant.
This better-than-expected employment data could mitigate concerns about the economic future; however, it might also dampen optimism regarding any aggressive interest rate cuts by the Federal Reserve in forthcoming months. In light of the jobs data, CME Group's FedWatch Tool now indicates a 91.2% probability of the Federal Reserve trimming rates by a quarter point in November, with an 8.8% likelihood of a half-point cut.
Wednesday's trading session exhibited a lackluster trend, which persisted into Thursday, as stocks oscillated around an unchanged line. The major averages ended modestly lower, with the Nasdaq declining by 6.65 points to 17,918.48, the S&P 500 falling 9.60 points to 5,699.94, and the Dow dropping 184.93 points to 42,011.59. This hesitation stemmed from traders awaiting the Labor Department's upcoming monthly jobs report.
One day prior to the expected jobs report, an uptick in initial unemployment claims was noted for the week ending September 28th. Additionally, market participants monitored rising tensions in the Middle East, which have led to a spike in crude oil prices. The Israel Defense Forces reported that about 100 projectiles were fired from Lebanon into Israel earlier today, and they also confirmed eliminating several Hezbollah commanders in a strike on a military facility in southern Lebanon. These events follow Iran's recent missile strike on Israel, with Israel promising a robust retaliation.
Despite a modest rise in gold prices, gold stocks experienced a sharp decline, dragging the NYSE Arca Gold Bugs Index down by 2.0%. Airline stocks also faced significant losses, reflected by a 1.4% drop in the NYSE Arca Airline Index. Steel, networking, and biotechnology stocks showed weakness, while energy stocks surged, buoyed by climbing crude oil prices.
**Commodity and Currency Markets**
Crude oil futures are rising by $0.50 to $74.21 per barrel, following a $3.61 surge to $73.71 per barrel on Thursday. Concurrently, gold futures have decreased by $16.40 to $2,662.80 an ounce after the previous day's $9.50 rise to $2,679.20 an ounce.
In currency markets, the U.S. dollar is trading at 148.43 yen, up from 146.93 yen in New York on Thursday. Against the euro, the dollar is valued at $1.0965, compared to the previous day’s $1.1013.
**Asia**
Asian markets provided mixed results on Friday amidst ongoing Middle East tensions and anticipation of the pivotal U.S. jobs report. The dollar hovered close to a six-week peak, and gold remained near record levels. Meanwhile, oil prices stabilized after a notable 5% surge, partly driven by U.S. President Joe Biden's discussions concerning potential Israeli strikes on Iran's oil sector.
The Shanghai market was closed for a holiday. In contrast, Hong Kong’s Hang Seng Index saw a significant rise of 2.8% to 22,736.87, buoyed by recent Chinese economic stimulus measures.
Japanese markets posted slight gains as Prime Minister Shigeru Ishiba presented his economic and fiscal agenda in a public address. The Nikkei 225 Index rose slightly by 0.2% to 38,635.62, supported by increasing energy shares due to elevated oil prices. The wider Topix Index increased by 0.4%, reaching 2,694.07.Seven & I Holdings saw a notable rise in its stock prices, climbing 3.1% following news that the retail conglomerate is in discussions with potential purchasers for its Ito-Yokado outlets and supermarkets.
In Seoul, the stock market experienced a slight uptick, breaking a three-day decline. The Kospi index increased by 0.3%, closing at 2,569.71. Hyundai Motor saw its shares rise by over 1%, whereas tech giant Samsung Electronics fell by 1.1%. Korea Zinc's stock surged 8.8% after the announcement of a share buyback plan amid ongoing internal management disputes.
In Australia, markets closed significantly lower, despite a surge in energy and gold mining stocks, which responded positively to escalating tensions in the Middle East. The S&P/ASX 200 Index declined by 0.7% to 8,150, while the more comprehensive All Ordinaries Index fell by 0.7% to close at 8,416.60. Over in New Zealand, the S&P/NZX-50 Index rose 0.4%, finishing the session at 12,619.94.
**Europe**
European markets displayed a mixed performance on Friday, driven by apprehensions over potential expansion of the Middle East conflict. The U.K.'s FTSE 100 Index dipped by 0.3%, while both Germany's DAX Index and France's CAC 40 Index saw increases of 0.5% and 0.8%, respectively.
Shipping companies like Maersk and Hapag Lloyd experienced significant declines, with their shares plummeting 7% and 13%, due to the deteriorating situation in the Middle East. Hexagon Purus ASA saw its shares drop nearly 16% following the mutual termination of its 2024–2027 agreement with Daimler Truck North America, part of Daimler Truck Holding AG, to supply battery electric vocational vehicles.
Conversely, Denmark’s DSV saw an impressive surge of 6.7% following its $5.5 billion share issue intended to partly fund the acquisition of Schenker. Similarly, Italian energy company Eni S.p.A. rose by 1.3% after securing U.K. governmental support and funding for an Economic License related to the Liverpool Bay CO2 transport and storage project.
Alstom SA, a French train manufacturer, jumped 5.2% after reaffirming its annual EBIT margin forecast of approximately 6.5%, an improvement of about 80 basis points from the previous year, aided by volume and mix, as well as cost reduction initiatives. Sanofi shares advanced 1.3% after reaching an agreement for Italian pharma firm Recordati S.p.A. to acquire global rights to Enjaymo, a unique treatment for cold agglutinin disease.
Among the energy firms, BP Plc gained about 1% and Shell increased marginally as oil prices continued their strong weekly upswing due to escalating Middle East tensions. Watches of Switzerland Group advanced over 2% following its acquisition of a New York-based platform for watch enthusiasts. On the other hand, J D Wetherspoon made slight losses after announcing its 2024 financial results.
**U.S. Economic Reports**
The Labor Department released a widely anticipated report showing that employment in the U.S. surpassed expectations with a significant increase in September. Non-farm payroll employment surged by 254,000 positions, following a revised rise of 159,000 in August. This exceeded economists’ forecast, which had predicted a rise of 140,000, against the initial estimation of 142,000 for the previous month.
Additionally, the unemployment rate decreased slightly to 4.1% in September, down from 4.2% in August, contrary to economists’ expectations that it would remain unchanged. At 9 am ET, New York Federal Reserve President John Williams is set to make his opening remarks at "The Future of New York City: Focus on Jobs" conference.
