Colin Cieszynski
The Before the Bell report is compiled by editors of The Globe and Mail and is updated throughout the morning to reflect latest developments. Colin Cieszynski, Chartered Financial Analyst and Chartered Market Technician, is chief market strategist with CMC Markets.
U.S. stock futures extended their earlier morning gains as the U.S. reported a generally stronger than expected jobs report. Net job gains were stronger than market expectations, but the unemployment rate unexpectedly ticked up and wage gains were softer than the consensus forecast.
Here's a snapshot of how the numbers came in:
-The U.S. added 227,000 nonfarm payrolls last month vs. an estimate of 170,000.
-The U.S. unemployment rate was 4.8 per cent, higher than the consensus expectation of 4.7 per cent.
-U.S. average hourly earnings rose 2.5 per cent from a year earlier, below the consensus estimate of 2.8 per cent.
Dow futures are up nearly 0.4 per cent, roughly double where they stood prior to the 830 a.m. (ET) data, pointing to a strong start of trading for North American markets today.
Earlier, stock markets around the world were steady overnight, as Chinese traders returned from Lunar New Year holidays.
The main event today is the U.S. nonfarm payrolls report, which could spark another round of Fed speculation trading. The greenback stabilized overnight after retreating for the better part of two days following Wednesday's dovish FOMC statement. The U.S. central bank indicated it still sees inflation as low and room for employment to grow without sparking inflation. On Thursday, ADP posted a stellar U.S. private sector payrolls report of 246,000 new jobs, way above the 165,000 the Street had expected. January was a month of turmoil in government jobs, ending in a federal hiring freeze. Still, I think that the new year unleashed another round of pent up hiring demand.
The response to overnight earnings reports has been mixed. Amazon.com fell 4 per cent following a mixed report that saw earnings beat the Street but sales results and guidance fell short of expectations. Visa and Amgen have been trading higher following results. U.S. financials, particularly banks and brokerages, could be active today. President Donald Trump has financial regulation in his sights and is expected to issue orders starting the overhaul of the Dodd-Frank response to the last financial crisis and block fiduciary rules that were expected to start this spring. JPMorgan and Wells Fargo are both up about 1 per cent in the premarket.
Service Purchasing Managers Index reports are also in focus today. So far the biggest impact has been in the UK, where a soft report has piled more pressure on the pound, taking It under $1.2500 against the U.S. dollar. US ISM non-manufacturing PMI is due at 10 a.m. ET.
Now, here is a closer look at key market data, and corporate and economic news.
MARKET DATA:
Futures (as of about 7 a.m. ET)
Dow +0.36 per cent; S&P 500 +0.27 per cent; Nasdaq: +0.20 per cent; TSX 60 +0.22 per cent
Equities
Japan's Nikkei +0.02 per cent
Shanghai composite index -0.59 per cent
Hong Kong's Hang Seng -0.24 per cent
Germany's DAX +0.31 per cent
London's FTSE +0.51 per cent
France's CAC 40 +0.88 per cent
Commodities
WTI crude oil (Nymex March) +0.41 per cent at $53.76 (U.S.) a barrel
Gold (Comex April) -0.25 per cent at $1,216.40 (U.S.) an ounce
Copper (Comex March) -1.17 per cent at $2.654 (U.S.) a pound
Currencies
Canadian dollar +0.02 at 76.74 cents (U.S.)
U.S. dollar index +0.124 at 99.914
Bonds
Canada 10-year bond yield -0.022 at 1.744 per cent
KEY ECONOMIC RELEASES
The U.S. added 227,000 nonfarm payrolls last month vs. an estimate of 170,000.
The U.S. unemployment rate was 4.8 per cent, higher than the consensus expectation of 4.7 per cent.
U.S. average hourly earnings rose 2.5 per cent from a year earlier, below the consensus estimate of 2.8 per cent.
Still to come:
(10 a.m. ET) U.S. factory orders for December. Consensus is an increase of 1.4 per cent from November.
KEY STOCKS TO WATCH
Bank stocks were up in premarket trading on reports that President Donald Trump was preparing to scale back the Dodd-Frank Wall Street reform law. Citigroup and Bank of America's shares climbed more than 1 per cent, while Goldman Sachs and JPMorgan gained about 0.7 per cent.
Amazon.com fell 3.8 per cent to $808.23 after the world's largest online retailer forecast a surprise dip in operating profit for the current quarter.
Dow component Visa rose 4 per cent to $85.63 following quarterly profit and revenue that beat analysts' expectations.
Apparel and footwear maker Deckers Outdoor dropped 21.4 per cent to $43.64 after missing quarterly revenue estimates.
Cybersecurity firm FireEye reported its first-ever drop in quarterly revenue on Thursday, sending its shares down nearly 19 per cent.
Earnings today include: Apollo Global Management LLC.; AutoNation Inc.; Brookfield Property Partners L.P.; Clorox Co.; Hershey Co.; LyondellBasell Industries NV; Phillips 66; Silvercorp Metals Inc.; Weyerhaeuser Co.
With files from wire services