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Stocks - U.S. Futures Down Ahead of Payrolls as Bounce Fades

Published 10/04/2019, 06:41 AM
Updated 10/04/2019, 07:04 AM
© Reuters.
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investing.com -- U.S. stocks were indicated to open lower Friday, as the market braced for a downbeat monthly employment report from the Bureau of Labor Statistics.

Hiring in the U.S. economy is expected to have increased by a net 140,000 in September, up from 130,000 in August but still running at a clip well below that seen in recent years. Fears of a weaker number have risen after surveys of both manufacturing and services industries showed activity to have slowed sharply last month, with direct negative impacts on hiring. The numbers are due at 8:30 AM ET (1230 GMT).

By 7 AM ET (1100 GMT), Dow futures were down 94 points, or 0.4%, while the S&P 500 futures contracts was down 12 points, likewise a drop of 0.4%. Nasdaq 100 Futures were down in line with their old-economy counterparties.

This week's data have forced market participants to drastically rethink the outlook for monetary policy, with many pricing in additional rate cuts from the Federal Reserve. Chairman Jerome Powell has repeatedly said that he'll "act as appropriate" to sustain the economy and keep a long expansion on its legs. Powell is due to speak later at 2 PM ET (1800 GMT).

"If jobs growth can remain robust, this may reassure markets on the growth outlook and could cause Powell to defer further easing until the December meeting," said Mark Dowding, chief investment officer at BlueBay Asset Management, in a note to subscribers. "However, any suggestion that the slowdown in manufacturing and business investment is causing hiring to slow and businesses to shed jobs could be a clear catalyst for additional action on the monetary policy front."

Among individual stocks, Apple (NASDAQ:AAPL) is set for a strong opening after a Japanese newspaper report that it's planning to increase iPhone 11 production by around 10%, as its decision to cut the new model's price underpins demand. The company hasn't confirmed the report but CEO Tim Cook said separately in an interview with France's Les Echos that he expects a big upgrade cycle in smartphones.

HP Inc (NYSE:HPQ) is set for a more mixed opening after saying it will cut up to 9,000 jobs - 16% of its workforce - to shore up profitability. The maker of laptop computers, printers and other hardware is also expanding its buyback program and raising its dividend. The company's shares fell 5.9% in after-hours trading.

Elsewhere, Crude oil futures drifted sideways, rising 0.1% to $52.49 a barrel, while gold futures also edged higher to $1,514.95 on expectations of lower interest rates. The dollar index, which measures the greenback against a basket of six developed-market currencies, inched down 0.1% on the same factors to 98.475.

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