Benzinga Market Primer, Friday August 3
U.S. equity futures rose early Friday ahead of the much anticipated Non-Farm Payrolls report. The Bureau of Labor Statistics is expected to report that the U.S. economy added 100 thousand jobs in July and 110 thousand private jobs. The range of estimates is very large, from 50 thousand to 165 thousand. Markets rallied ahead of the release, either on hopes of a strong number or hopes of a really weak number which would force the Fed to act in September.
In other news around the markets:
- ECB President Mario Draghi disappointed markets Thursday by not launching a new round of crisis fighting measures, however the groundwork for a grand plan has been laid.
- The Daily Telegraph reported that Spain will hold a press conference after its weekly cabinet meeting in which it will detail plans to ask for a bailout, however these rumors have since been denied by authorities.
- The official Chinese Non-Manufacturing PMI fell in July to 55.6 from 56.7 in June.
- Eurozone services PMI rose to 47.9 from 47.6 in June, buoyed by strength in Spain, Germany and France.
- S&P 500 futures rose 10 points to 1,371.90.
- EUR/USD 1.2238 following Thursday's 300 pip trading range.
- Spanish 10-year yield 7.105 percent after trading as high as 7.435 percent.
- Italian 10-year yield 6.147 percent after trading as high as 6.454 percent.
Asian shares fell overnight, following the disappointment from Draghi and the continued slowdown in China. Chinese shares actually rose, as the new data points to heightened chances of PBOC easing, which traders took as bullish, bidding up stocks. The Shanghai Composite Index rose over 1 percent, however Japanese, Korean, and Australian shares all fell over 1 percent. European shares rose on hopes that Draghi's master plan is taking shape and also reversing massive gains in peripheral indexes from Thursday. Spain's Ibex rose over 1 percent after falling more than 5 percent Thursday.
Commodities rose slightly ahead of the jobs report, as WTI Crude futures rose 1.18 percent to $88.16 per barrel and Brent Crude futures rose 0.71 percent to $106.65 per barrel. Copper futures rose 0.87 percent to $331.90 per pound, gold futures rose 0.43 percent to $1,597,50 per ounce, and silver futures rose 0.85 percent to $27.225 per ounce.
The dollar index fell nearly 0.5 percent in early Friday trading as hopes of further Fed easing hurt the dollar. Most of the drop in the index can be attributed to euro and pound strength, as the euro rose nearly 0.55 percent against the dollar. The EUR/AUD continued its pattern of making new record lows, doing so early Friday. The EUR/JPY also fell back below 96.
Notable earnings Friday include:
- Proctor and Gamble (NYSE: PG) is expected to report Q2 EPS of $0.77.
- Berkshire Hathaway (NYSE: BRK-A) is expected to report Q2 EPS of $1,777.00 per share, however this release is only possible.
- Viacom (NASDAQ: VIAB) is expected to report Q2 EPS of $1.00.
Aside from the payrolls report, the ISM Non-Manufacutring Survey and the ECRI Weekly report on the state of the economy are both due out.
Good luck and good trading.
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