China's stock market is certainly keeping investors on their toes.

After surprising everyone on Friday by opening higher, the market quickly began to bounce around between positive and negative territory.  

Other Asian markets seemed to take the volatility in stride, however, and were mostly higher in early Friday trading.  

China's tentative recovery followed a tumultuous day on Thursday, when stocks plummeted 7% at the opening, forcing regulators to quickly shut the market for the rest of the day. The meltdown triggered a massive selloff in global markets, including the U.S. 

By Thursday's close, both the Dow Jones Industrial Average and Nasdaq had entered correction territory, being down at least 10% from their most recent highs.

The S&P 500, which fell 2.2% on Thursday and is down nearly 5% for the week, is almost there. It's off 9% from its May high.

Whatever happens overnight in Asia, U.S. investors will be anxiously watching the results when they wake up Friday morning. Even a positive U.S. jobs report at 8:30 am Friday may not be enough to calm the markets.  

"While we do seem to be the best of the major economies, we're still pretty shaky and so anything that calls the global recovery into question filters right back into the U.S.," explained Chris Gaffney, senior market strategist for EverBank Wealth Management.

The state of China's economy has darkened trading so far this year as officials devalue the yuan to stimulate the manufacturing sector by making exports cheaper.

While China's economy doesn't directly have a massive impact on the U.S., a slowdown in the world's second-largest economy have a ripple effect on major economies worldwide. 

The World Bank expects to see slower global growth this year as China's economy continues to slow, commodities fall even further, and Brazilian and Russian economies contract. The organization cut its 2016 growth forecast to 2.9% from 3.3%.

Expectations for the timing of the next rate hike have been pushed back to June after the Federal Reserve's minutes from its December meeting conveyed a more hesitant central bank. Members appeared more cautious over December's rate hike, the first in nearly a decade, as fears over low inflation persisted.

The official U.S. nonfarm payrolls report will be released on Friday morning. Economists expect 211,000 jobs to have been added to the U.S. economy in December, while the unemployment rate is expected to remain unchanged at 5%. Average hourly earnings are expected to increase 0.2%.

Despite the widespread selloff, there were a number of stocks kicking convention. Retail names pulled higher as investors grew less worried over the effect of a warmer winter on sales. J.C. Penney (JCP) shares added 3.3% after the retailer announced holiday-period comparable sales climbed 3.9%. The department store chain said warmer winter weather hit sales of seasonal clothing.

Macy's (M) jumped more than 2% after announcing plans to cut costs by around $400 million, which included closing 40 stores by the end of spring. The retailer also said it expects same-store sales to have declined 4.7% during the holiday-shopping months of November and December. Weaker performance was largely tied to warmer weather this winter which dented sales of coats, sweaters, gloves and scarves.

Constellation Brands (STZ) climbed 4% after raising full-year guidance as its previous acquisitions of Corona and Modelo from Anheuser-Busch InBev (BUD) two years ago continued to fuel sales. The company said it expects to build a new brewery in Mexicali, Mexico, to keep up with demand.

 

 

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