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US Futures Neutral As Attention Returns To The Jobs Report

US Postal Service (USPS) (Photo: NPR)

On Thursday, US stock futures were mixed, and the Dow appeared headed for another down start as investors once more turned to labor market data for clues about the direction of interest rates.

Intrest Rate Hikes

Following their third consecutive closing loss on Wednesday, Dow Jones Industrial Average (^DJI) futures dropped over 0.2%, while S&P 500 (\GSPC) futures were essentially unchanged. With a 0.2% increase, Nasdaq 100 (^NDX) futures suggested that tech companies were on the rise.

This week’s indications that the labor market is at last returning to normalcy suggest that the Federal Reserve’s interest rate hikes intended to combat inflation are having the expected effect. Traders have begun placing bets as a gentle landing for the economy appears more plausible.

However, the Bank of Japan’s policymakers’ suggestion that the end of the institution’s negative interest rate policy is imminent unsettled the nerves of the market on Thursday. The 10-year Treasury yield (^TNX) increased by up to eight basis points to 4.18% as a result of that possibility.

December Is A Boring Month

Jobs


Photo From: Chattanooga Times Free Press

Adding to the caution was rising suspicion that equities are set for a slowdown after their torrid November rally, given December is generally a “boring” month for the markets.

In light of this, investors will be closely monitoring Thursday’s most recent weekly statistics on unemployment claims. However, the key litmus test for inflation and interest-rate expectations prior to the Fed’s final meeting of the year next week will be the pivotal monthly US jobs data on Friday.

Oil prices recovered somewhat in the commodities market after plunging to a five-month low. The international benchmark price for crude futures, West Texas Intermediate (CL=F) and Brent (BZ=F) both increased by less than 1%.

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