Friday April 6th

6-04-2018

US stock futures pare losses after jobs weak report

U.S. stock index futures cut into steep losses on Friday following the release of much weaker employment data. Around 8:45 a.m. ET, Dow Jones industrial average futures traded 185 points lower, indicating a drop of 190.22 points at the open. Dow futures were down more than 250 points earlier on Friday. The Nasdaq 100 and the S&P 500 futures also indicated a negative start to Friday's session for their respective markets. The Labor Department reported the U.S. economy added 103,000 jobs in March. Economists polled by Reuters expected a gain of 193,000. Investors pored over the data to looking for any indications as to how the U.S. is performing and what this means for the Federal Reserve when it comes to the future path of raising interest rates. Futures were already under pressure on worries that a trade war between the U.S. and China could be around the corner. After China announced fresh tariffs on 106 U.S. products Wednesday, President Donald Trump went on to threaten more levies, stating that he has asked the United States Trade Representative to consider $100 billion in additional tariffs against China. Shares of large-cap tech companies fell before the bell amid fears they could be hurt by a trade war between the U.S. and China. Shares of Apple dropped 0.9 percent, while Facebook and Alphabet fell 1.2 percent and 1.3 percent, respectively. Amazon also dropped 1.2 percent. Boeing, another company that could be adversely affected by a trade war with China, fell 1.8 percent in the premarket. Consequently, concerns that a trade war is brewing rattled investor sentiment across the globe Friday. European and Asian stocks also fell on Friday. China's Commerce Ministry said Friday the country will not hesitate to react with a "major response to the new tariffs from the U.S. Japan's Nikkei 225 slipped 0.36 percent, or 77.9 points, to close at 21,567.52 amid choppy trade. Despite the move lower amid elevated trade tensions, the benchmark finished the week higher by around 0.5 percent. Meanwhile, South Korea's Kospi slipped 0.33 percent to end at 2,429.58, paring steeper declines seen earlier in the session. Hong Kong's Hang Seng Index rose 1.09 percent by 3:00 p.m. HK/SIN, shrugging off jitters seen in the rest of the region as markets returned from a one-day holiday. Markets in mainland China, Taiwan and Thailand were closed on Friday. Oil prices fell on Friday after U.S. President Donald Trump's threat of new tariffs on China reignited fears of a trade war between the world's two biggest economies. "There is a risk for oil prices that China uses the bazooka option it has on U.S. crude oil exports. China is the main importer (after Canada) of U.S. crude oil, to the tune of about 400,000 barrels per day," Petromatrix said. "If China was to impose counter tariffs on U.S. crude, it would become quickly very heavy for the U.S. supply and demand picture, resulting in U.S. crude oil price pressure that would have a negative impact on global oil prices." Brent crude for June delivery was down 46 cents at $67.87 per barrel at 7:57 a.m. ET. U.S. West Texas Intermediate crude for May delivery was down 60 cents at $62.94 a barrel. Both are headed for their biggest weekly fall since early March. Gold rallied on Friday following much lower-than-expected U.S. nonfarm payrolls data, shifting market implications for interest rate policy, as concerns over a China-U.S. trade standoff kept prices underpinned. Spot gold slipped 0.29 percent at $1,322.38 an ounce at 8:50 a.m. EST, off an earlier high of $1,333.28. The precious metal settled after an initial spike following the huge slide in payrolls data from month to month. U.S. gold futures for June delivery were 0.2 percent lower at $1,326.40. "The key to gold's direction remains the dollar, and we expect the dollar to recover a bit more," ABN Amro analyst Georgette Boele said.