Futures mixed ahead of jobs report
August employment figures should provide insight into the US labor market and the next possible Fed moves.
U.S. stock futures were mixed ahead of the monthly jobs report. August nonfarm payroll data will be released at 8:30 a.m. ET. The figures could provide clues not just into the U.S. labor market, but also into any Federal Reserve moves.
Analysts expect 180,000 jobs to have been added in August, according to Reuters, up from 162,000 added in the previous month. The unemployment rate is forecast to remain at 7.4%. Depending on how well the labor market is doing, the Federal Reserve could prolong its monetary stimulus or hasten the tapering of its quantitative easing program.
In other news around the markets:
At the five year of the financial crisis, the Federal Reserve reported that corporate bond debt has risen 59% since 2007, according to The Wall Street Journal. Companies from Apple to Verizon are funding growth spurts and acquisitions by issuing record high numbers of corporate bonds.
Moody's Investors Service has changed their outlook for the German banking system from "negative" to "stable." The German banking system had been rated "negative" since April 2008.
As the U.S. decides whether or not to launch a military attack in Syria, Iran prepares for retaliation at the U.S. embassy and other American interests in Baghdad. The Wall Street Journal reported that U.S. intelligence intercepted communication from Iran to Shiite militant groups in Iraq calling for the attacks in the event of a military strike in Syria.
The Bank for International Settlements' most recent report on foreign exchange trade showed that the Chinese yuan jumped to ninth and joined the top 10 most traded international currencies for the first time. As the Chinese government loosens banking regulations, most are expecting to see the yuan's popularity increase.
Fed Chairman Ben Bernanke's term expires at the end of January, but discussions about his replacement are likely to be put off until the situation in Syria is resolved. U.S. President Barack Obama will likely wait to announce his candidate until a decision has been made about military action in Syria.
Asian markets mostly ended the week on a positive note. The Shanghai composite was up 0.83%, the KOSPI gained 0.19%, and the Hang Seng index was up 0.10%. However, the Shenzhen composite fell 0.31%, and the Japanese NIKKEI lost 1.45%.
European markets were lower on Friday following the European Central Bank's policy meeting on Thursday. The eurozone's STOXX 600 was down 0.12%, the German Dax fell 0.16%, France's CAC 40 fell 0.14%, and the UK's FTSE was mostly flat with only a 0.06% loss.
With military action in Syria still possible, energy futures were set to end the week on a high note. Brent futures were up 0.12%, and WTI futures were up 0.28%. Gold lost 0.32%, and Silver was down 0.17%. Industrial metals were up as copper gained 0.86%, and aluminum was up 0.47%.
After briefly surpassing the 100 yen to 1 dollar ratio, the yen gained some ground against the dollar and strengthened 0.48% against the greenback. The euro continued to slide against the dollar, trading at $1.313. The pound lost 0.06% against the dollar, and the Indian rupee continued to strengthen, gaining 1% against the dollar.
Earnings reported Thursday
Notable companies that reported earnings on Thursday included:
Finisar (FNSR) reported first quarter earnings per share of $0.31 on revenue of $266.10 million, in line with expectations.
Verifone Systems (PAY) reported third quarter earnings per share of $0.24 on revenue of $416.00 million, compared to expected earnings per share of $0.25 on revenue of $400.83 million.
Smith & Wesson (SWHC) reported first quarter earnings per share of $0.40 on revenue of $171.02 million, compared to expected earnings per share of $0.36 on revenue of $165.02 million.
Stocks moving in the premarket included:
J.C. Penney (JCP) continued its climb and gained 1.85% in premarket trade.
Fastenal (FAST) gained 2.6% in premarket trade after reports that the company's sales grew 7.2% in August.
Pepco Holdings (POM) was up 1.42% in premarket trade as investors prepared for the company to trade ex-dividend at market opening.
SAIC (SAI) was down 2.08% in premarket trade after the company announced that budget cuts caused a steep drop in second quarter profits.
Viacom (VIA) was down 1.69% in premarket trade following as the company worked out a deal with Sony to stream show channels on a pay-TV service.
Notable companies expected to report earnings on Friday include:
UTi Worldwide (UTIW) is expected to release second quarter earnings per share of $0.14 on revenue of $1.15 billion, compared to last year's earnings per share of $0.20 on revenue of $1.16 billion.
On Friday's economic calendar, the U.S. will release nonfarm payrolls data, including the unemployment rate. Data from Europe will include German industrial production and British manufacturing production, industrial production and trade balance data.
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