In Europe, the Stoxx 600 was marked 0.65% lower in Frankfurt following the June payroll report, with smaller percentage declines from benchmarks around the region, after a much weaker-than-expected reading for May industrial orders from Germany.
The Friday Market Minute
- Global stocks little-changed, U.S. futures slip after a stronger-than-expected U.S. jobs report even as government bond markets continue to rally on hopes of deeper central bank support.
- U.S. employers added 224,000 new jobs last month, but modest wage growth of 3.1% could compel the Fed to further define its near-term rate forecasts.
- Samsung estimates another quarterly profit decline, as a glut in global semiconductors hammers prices as Huawei restrictions hit the world's biggest smartphone maker.
- Global oil prices edge higher amid Gulf tensions and reports of falling OPEC production, but tepid demand forecasts cap gains.
- U.S. equity futures suggest a modestly weaker open on Wall Street, with the S&P 500 retreating from the 3,000 point barrier and the Dow falling 100 points at the opening bell.
Wall Street futures edged lower Friday as investors trimmed bets on deeper Federal Reserve rate cuts following a stronger-than-expected June jobs report.
U.S. employers added 224,000 new jobs last month, according to the June employment report published Friday by the Bureau of Labor Statistics, while average hourly wages rose an annual 3.1% clip, just shy of the market consensus 3.2%. The headline unemployment rate also bumped higher, to 3.7%, but remains close to the lowest levels since 1969.
"Fed watchers hoping for evidence for deeper rate cuts will likely be disappointed by this report which shows a relatively healthy labor market," said Glassdoor senior economist Daniel Zhao. " The stagnating wage gains, however, are concerning in this tight of a labor market. We'll be watching closely in the coming months to see whether wage growth continues to disappoint."
U.S. equity futures suggest modest declines on Wall Street following the reading, with contracts tied to the Dow Jones Industrial Average indicating a 102 point slide while those linked to the S&P 500, which closed at a record 2,995.82 points on Wednesday, are guiding to a 14.7 point dip.
Global government bond markets had tested fresh-record lows prior to the release, as investors prep for the Federal Reserve's next move on interest rates and justify central bank signally from major economies around the world, but rates backed up a bit following the stronger-than-expected reading.
Benchmark 10-year Treasury notes rose past 2% for the first time in a week, while the U.S. dollar index, which tracks the greenback against a basket of six global currencies, traded at the highest level since June 20 as investors pared bets on a 50 basis point rate cut from the Fed in July.
Shares in Asia drifted from recent multi-month highs to pull the MSCI ex-Japan index into a 0.1% loss on the session as Samsung Electronics (SSNLF) forecast its third consecutive quarterly profit decline as the U.S. blacklisting of Huawei Technologies, and weaker global smartphone markets, continues to hammer the bottom line of the world's biggest chipmaker.
Broader investor concern for the strength of the global economy was largely at play in oil markets, as well, which have fallen more than 4.5% this week as manufacturing data around the world slumped to the weakest levels in seven years.
Military tensions in the Gulf region, however, continue to give markets some support, with news that the British Royal Marines sized and Iranian oil tanker heading for Syria, allegedly in violation of international sanctions, adding to the collective concern. A Reuters survey that noted OPEC production fell to the lowest level in five years in May also gave markets an early Friday boost.
Brent crude contracts for August delivery, the global benchmark, were seen 22 cents higher from their Thursday close and changing hands at $63.52 per barrel in early European trading. WTI contracts for the same month, which are more tightly linked to U.S. gas prices, were marked 1 cent higher at $56.81 per barrel.