Stock Futures Waver After Jobs Report


U.S. stock futures wavered after the monthly jobs report missed expectations.

Futures tied to the S&P 500 slipped around 0.3% , after the broad-market index closed down 0.1% in Thursday’s choppy session. Nasdaq-100 futures slipped 0.8% and Dow Jones Industrial Average futures edged down around 0.2%.

The yield on the benchmark 10-year Treasury note hovered at 1.760%, after four consecutive days of rises. Yields increase as bond prices decline.

The latest monthly jobs report showed that the U.S. added 199,000 jobs in December, below the 422,000 expected. Still, 2021 concluded with the U.S. adding a record number of jobs last year and the jobless rate fell to 3.9%.

Stocks came under pressure this week after the Federal Reserve’s minutes confirmed its intention to pull back stimulus and suggested it might do so sooner and faster than previously planned, due to high inflation. The S&P 500 is down 1.5% this week, on track for the worst weekly performance since mid-December.

Meme stock

GameStop

surged around 18% in premarket trading after The Wall Street Journal reported the company was planning to enter the cryptocurrency and nonfungible token markets.

AMC Entertainment,

another company popular with retail traders, advanced 5%.

Government bonds have sold off as markets price in the possibility of earlier interest rate increases and the Fed shrinking its portfolio of bonds in the near future.

Stocks have been under pressure since the release of the Federal Reserve’s policy meeting minutes.



Photo:

BRENDAN MCDERMID/REUTERS

“Everything happening in markets this week was about expectations on how fast the Fed is going to tighten policy,” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “This is a transition year where we go from record policy support toward actual tightening. There will be huge volatility as we figure out how to work in this paradigm.”

Fed officials have said labor market health is a crucial factor in their monetary policy decisions. Investors will be scrutinizing the report closely to see if it is consistent with the Fed’s plans outlined in the minutes and whether wages are continuing to increase, which could mean more sustained inflation. 

“If the data shows the labor market is still running pretty hot, it strengthens the case for hawks that the Fed needs to get on and tighten policy,” said Sebastian Mackay, a multiasset fund manager at Invesco.  

Oil prices edged up. Global benchmark Brent crude rose 0.8% to $82.63 a barrel in recent trading, the highest level in over eight weeks. Oil supply could potentially be lower due to cold weather in North Dakota and Alberta, Canada and if protests in crude producer Kazakhstan affect output, according to analysts at ING.

Protests first triggered by rising fuel prices in Kazakhstan have turned violent, prompting a Russian-led military coalition to send troops to the oil-rich country. Video shows government buildings and streets in several cities being stormed by demonstrators. Photo: Mariya Gordeyeva/Reuters

Overseas, the pan-continental Stoxx Europe 600 ticked down 0.3%.

European government bond yields rose, with the 10-year German bund yield climbing to minus 0.1%. If it surpasses 0, it will be in positive territory for the first time since 2019.

In Asia, major stock benchmarks were mixed. The Shanghai Composite Index fell 0.2%, while Hong Kong’s Hang Seng Index rose 1.8%, led by gains in technology stocks. E-commerce giants Alibaba rose 6.5% and

JD.com

gained 4.8%. South Korea’s Kospi Index rose 1.2%.

—Gunjan Banerji contributed to this article.

Write to Anna Hirtenstein at [email protected]

Corrections & Amplifications
GameStop rallied premarket. An earlier version of this article incorrectly referred to GameStop as GameStock. (Corrected on Jan. 7.)

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2022-01-07 13:26:00