Benzinga Market Primer, Friday, November 2: Non-Farm Payrolls Edition
U.S. equity futures fell slightly in early Friday trade ahead of the Non-Farm Payrolls release, the last such release before the Presidential election next week. See below for a full preview of the data by the numbers.
In other news around the markets:
- Boston Fed President Eric Rosengren spoke overnight and was extremely dovish, stating that the QE3 program should stay in effect until the unemployment rate falls to 7.25 percent and that interest rates should stay near zero until the unemployment rate falls to 6.25 percent.
- Germany's finance minister Wolfgang Schaeuble spoke overnight, stating that G20 nations need further structural reforms and debt reduction and that he sees debt reduction as a global task.
- The Eurozone Manufacturing PMI rose to 45.4 in October from 45.3 in September and beat expectations of a flat reading at 45.3. Strength in Germany and France was offset by weakness in Spain and Italy.
- S&P 500 futures fell 1.7 points to 1,421.50.
- The EUR/USD was was lower at 1.2878.
- Spanish 10-year government bond yields fell to 5.599 percent.
- Italian 10-year government bond yields fell to 4.93 percent.
- Spot Gold rose 0.03 percent to $1,714.70 per ounce.
Asian shares were stronger overnight on the back of the stronger than expected economic data in the U.S. Thursday and hopes that Non-Farm Payrolls will be stronger than expected. The Japanese Nikkei Index rose 1.17 percent and the Shanghai Composite Index rose 0.6 percent while the Hang Seng Index rose 1.33 percent in Hong Kong trading. In addition, the Korean Kospi rose 1.07 percent and Australian shares rose 0.05 percent.
European shares were mostly lower following the PMI release which showed a sharp decline in Italian and Spanish manufacturing in October. Spain's Ibex Index fell 0.44 percent and the Italian MIB Index fell 0.69 percent in early Milan trading. Also, the German DAX fell 0.15 percent and the French CAC fell 0.29 percent while U.K. shares fell 0.18 percent in London.
Commodities were mixed in overnight trade ahead of the employment report. WTI Crude futures rose 0.99 percent to $87.09 per barrel and Brent Crude futures fell 0.46 percent to $108.20 per barrel. Copper futures rose 0.98 percent overnight to $355.20 per pound, extending gains seen in the metal from the past few days. Gold futures for December delivery fell 0.21 percent to $1,715.50 per ounce and silver futures fell 0.21 percent to $32.25 per ounce for the same delivery.
Currency markets showed dollar strength and euro weakness overnight as hopes of a strong employment report and weak manufacturing data in Europe weighed on markets. The EUR/USD was lower at 1.2878 and the dollar gained against the yen to 80.24, a sharp spike through the psychologically important 80 level overnight. Overall, the Dollar Index rose 0.36 percent to 80.33 on strength against all six currencies that make up the basket of the Dollar Index. In addition, the euro was broadly weak, falling against the yen, the Aussie dollar, and the pound.
Stocks moving in the pre-market included:
- Ford (NYSE: F) shares rose 0.27 percent in pre-market trading following the company reporting October auto sales that were fairly strong.
- LinkedIn (NYSE: LNKD) shares rose a whopping 9.02 percent pre-market following a much stronger than expected earnings release after the close on Thursday.
- Starbucks (NASDAQ: SBUX) shares rose 7.25 percent pre-market after the company posted strong earnings and increased its dividend.
- Cisco Systems (NASDAQ: CSCO) shares rose 0.43 percent as strong call buying over the last few days has sent the stock higher. Traders have bought some 430 calls for every 100 puts over the past 20 sessions.
There are several notable companies expected to report earnings Monday, including:
- Alpha Natural Resources (NYSE: ANR) is expected to report a third quarter loss of $0.45 a share vs. a profit of $0.35 a year ago.
- Chevron (NYSE: CVX) is expected to report third quarter EPS of $2.85 vs. $3.67 a year ago.
- Fortress Investment Group (NYSE: FIG) is expected to report third quarter EPS of $0.11 vs. $0.08 a year ago.
- Hess Corp. (NYSE: HES) is expected to report third quarter EPS of $1.18 vs. $1.11 a year ago.
- The Madison Square Garden Co. (NASDAQ: MSG)is expected to report first quarter EPS of $0.18 vs. $0.28 a year ago.
- Valeant Pharmaceuticals (NYSE: VRX) is expected to report third quarter EPS of $1.16 vs. $0.66 a year ago.
- Wabco Holdings (NYSE: WBC) is expected to report third quarter EPS of $1.06 vs. $1.19 a year ago.
On the economic calendar Friday, it's the first Friday of the month, which means its Non-Farm Payrolls day. By the numbers:
- Median estimate is 125,000 non-farm jobs added, also 125,000 private jobs as well.
- September reading was 114,000.
- High estimate is 168,000, low estimate is 30,000.
- 6-month average is 106,000.
- ISM Manufacturing Employment 52.1 vs. 54.7 prior.
- Challenger Job Cuts 48,000 vs. 34,000 in September, a 5-month high.
- Initial jobless claims 4-week moving average is 367,000 vs. 375,000 at the time of the September release.
Also, factory orders are due out and the Fed's Williams is set to speak.
Good luck and good trading.
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