Markets Find Support from September US Jobs Report
The winning streak for the US stock markets continues in early action on the heels of a stronger-than-expected September nonfarm payroll report, which also came with upward revisions to the figures posted in August. Treasuries moved lower on the employment data, ahead of reports on wholesale inventories and consumer credit. Meanwhile, equity news is light today, with Illumina Inc issuing a 3Q revenue estimate that missed analysts' forecasts, while suspending its full-year guidance. Overseas, Asian stocks finished broadly higher on optimism about a possible bank recapitalization plan in Europe, while the favorable US jobs data is helping European stocks extend recent gains.
As of 8:46 a.m. ET, the December S&P 500 Index Globex future is 9 points above fair value, the Nasdaq 100 Index is 6 points above fair value, and the DJIA is 99 points above fair value. WTI crude oil is increasing $1.05 to $83.64 per barrel, and the Bloomberg gold spot price is up $6.96 at $1,658.32 per ounce. Elsewhere, the Dollar Index-a comparison of the US dollar to six major world currencies-is down 0.5% at 78.23.
Illumina Inc. (ILMN $40) is sharply lower after the life science tool maker estimated 3Q revenues of about $235 million, below the $276 million consensus estimate of analysts surveyed by Reuters. The company said its revenues were negatively impacted by an "unprecedented slowdown" in purchasing due to continued uncertainty surrounding the levels of research funding in the US and Europe and overall economic conditions, as well as temporary excess capacity in the market. ILMN also suspended its guidance for the full year.
Nonfarm payrolls top forecasts, wholesale inventories and consumer credit due out later
Nonfarm payrolls rose by 103,0000 month-over-month (m/m) in September, compared to the consensus estimate of economists surveyed by Bloomberg, which forecasted a 60,000 increase, and the initial flat reading seen in August was revised to a gain of 57,000 jobs. Additionally, excluding government hiring and firing, private sector payrolls increased by 137,000 in September, versus the forecast of a gain of 90,000, after expanding by an upwardly adjusted 42,000-from an initially reported 17,000 gain-in August. The unemployment rate remained at 9.1%, matching expectations. Additionally, average hourly earnings were also inline with forecasts, rising 0.2% m/m but August's 0.1% decline was revised to a decrease of 0.2%, while average weekly hours unexpectedly rose to 34.3, from 34.2 in the previous month, where economists expected it to remain.
Treasuries moved lower following the employment data, with the yield on the 2-year note up 1 bp to 0.27%, the yield on the 10-year note gaining 10 bps to 2.09%, and the 30-year bond rate is 11 bps higher at 3.06%.
Later this morning, the US economic calendar will yield the release of wholesale inventories, expected to rise 0.6% m/m in August, after gaining 0.8% in July, while in the final hour of trading, we will get a look at consumer credit, forecasted to increase by $8.0 billion in August, after rising by $11.97 billion in July.
European stocks extend recent gains after US jobs data
The equity markets in Europe have moved to the upside in afternoon action on the favorable US jobs data, extending the steep gains seen in the past two sessions on hopes of a eurozone plan to recapitalize the region's banking sector. However, uncertainty about a Greek debt default is reemerging as France and Germany appear to be at odds regarding the future for the troubled nation ahead of a meeting in two days and a final decision on Greece's next installment of bailout aid has yet to be determined. Meanwhile, UK banks are being bogged down by Moody's Investors Service downgrading 12 of the region's banks, including Royal Bank of Scotland Group Plc. (RBS $8) and Lloyds Banking Group Plc. (LYG $2), due to a lesser probability of government support for the financial institutions.
In economic news, German industrial production fell 1.0% m/m in August, after rising a downwardly revised 3.9% in July, but compared to the 2.0% drop that economists had projected. Elsewhere, UK producer prices came in hotter than expected for September, while the French trade deficit narrowed more than anticipated in August.
The UK FTSE 100 Index is up 0.8%, France's CAC-40 Index is advancing 0.9%, Germany's DAX Index is gaining 0.8%, Switzerland's Swiss Market Index is trading 0.1% higher, and Greece's Athex Composite Index is rising 2.1%.
European banking sector optimism supports Asian markets
Stocks in Asia finished broadly higher amid growing optimism that European leaders are working toward a plan to help recapitalize its troubled banking sector, ahead of Friday's US labor report. Japan's Nikkei 225 Index rose 1.0%, led by banking stocks, and after the Bank of Japan left its benchmark interest rate unchanged at 0.10%, as expected. In other Japanese economic news, the nation's Leading Index declined from 104.6 in July to 103.8 for August. Meanwhile, South Korea's Kospi Index gained 2.9% amid the optimism toward the eurozone, while shares of Samsung Electronics Co. (SSNLF $800) rose modestly after it reported better-than-expected profits on growth of its smartphone business, but earnings in its chip and flat-panel screens units declined. Elsewhere, Australia's S&P/ASX 200 Index increased 2.3% and the Hong Kong Hang Seng Index rallied 3.1%, while Taiwan's Taiex Index rose 1.1%, after a report showed the nation's trade surplus narrowed more than expected as imports outpaced exports, but both came in stronger than expected for September. Finally, China's Shanghai Composite Index remained closed for a holiday and will return to trading on Monday.
The winning streak for the US stock markets continues in early action on the heels of a stronger-than-expected September nonfarm payroll report, which also came with upward revisions to the figures posted in August. Treasuries moved lower on the employment data, ahead of reports on wholesale inventories and consumer credit. Meanwhile, equity news is light today, with Illumina Inc issuing a 3Q revenue estimate that missed analysts' forecasts, while suspending its full-year guidance. Overseas, Asian stocks finished broadly higher on optimism about a possible bank recapitalization plan in Europe, while the favorable US jobs data is helping European stocks extend recent gains.
As of 8:46 a.m. ET, the December S&P 500 Index Globex future is 9 points above fair value, the Nasdaq 100 Index is 6 points above fair value, and the DJIA is 99 points above fair value. WTI crude oil is increasing $1.05 to $83.64 per barrel, and the Bloomberg gold spot price is up $6.96 at $1,658.32 per ounce. Elsewhere, the Dollar Index-a comparison of the US dollar to six major world currencies-is down 0.5% at 78.23.
Illumina Inc. (ILMN $40) is sharply lower after the life science tool maker estimated 3Q revenues of about $235 million, below the $276 million consensus estimate of analysts surveyed by Reuters. The company said its revenues were negatively impacted by an "unprecedented slowdown" in purchasing due to continued uncertainty surrounding the levels of research funding in the US and Europe and overall economic conditions, as well as temporary excess capacity in the market. ILMN also suspended its guidance for the full year.
Nonfarm payrolls top forecasts, wholesale inventories and consumer credit due out later
Nonfarm payrolls rose by 103,0000 month-over-month (m/m) in September, compared to the consensus estimate of economists surveyed by Bloomberg, which forecasted a 60,000 increase, and the initial flat reading seen in August was revised to a gain of 57,000 jobs. Additionally, excluding government hiring and firing, private sector payrolls increased by 137,000 in September, versus the forecast of a gain of 90,000, after expanding by an upwardly adjusted 42,000-from an initially reported 17,000 gain-in August. The unemployment rate remained at 9.1%, matching expectations. Additionally, average hourly earnings were also inline with forecasts, rising 0.2% m/m but August's 0.1% decline was revised to a decrease of 0.2%, while average weekly hours unexpectedly rose to 34.3, from 34.2 in the previous month, where economists expected it to remain.
Treasuries moved lower following the employment data, with the yield on the 2-year note up 1 bp to 0.27%, the yield on the 10-year note gaining 10 bps to 2.09%, and the 30-year bond rate is 11 bps higher at 3.06%.
Later this morning, the US economic calendar will yield the release of wholesale inventories, expected to rise 0.6% m/m in August, after gaining 0.8% in July, while in the final hour of trading, we will get a look at consumer credit, forecasted to increase by $8.0 billion in August, after rising by $11.97 billion in July.
European stocks extend recent gains after US jobs data
The equity markets in Europe have moved to the upside in afternoon action on the favorable US jobs data, extending the steep gains seen in the past two sessions on hopes of a eurozone plan to recapitalize the region's banking sector. However, uncertainty about a Greek debt default is reemerging as France and Germany appear to be at odds regarding the future for the troubled nation ahead of a meeting in two days and a final decision on Greece's next installment of bailout aid has yet to be determined. Meanwhile, UK banks are being bogged down by Moody's Investors Service downgrading 12 of the region's banks, including Royal Bank of Scotland Group Plc. (RBS $8) and Lloyds Banking Group Plc. (LYG $2), due to a lesser probability of government support for the financial institutions.
In economic news, German industrial production fell 1.0% m/m in August, after rising a downwardly revised 3.9% in July, but compared to the 2.0% drop that economists had projected. Elsewhere, UK producer prices came in hotter than expected for September, while the French trade deficit narrowed more than anticipated in August.
The UK FTSE 100 Index is up 0.8%, France's CAC-40 Index is advancing 0.9%, Germany's DAX Index is gaining 0.8%, Switzerland's Swiss Market Index is trading 0.1% higher, and Greece's Athex Composite Index is rising 2.1%.
European banking sector optimism supports Asian markets
Stocks in Asia finished broadly higher amid growing optimism that European leaders are working toward a plan to help recapitalize its troubled banking sector, ahead of Friday's US labor report. Japan's Nikkei 225 Index rose 1.0%, led by banking stocks, and after the Bank of Japan left its benchmark interest rate unchanged at 0.10%, as expected. In other Japanese economic news, the nation's Leading Index declined from 104.6 in July to 103.8 for August. Meanwhile, South Korea's Kospi Index gained 2.9% amid the optimism toward the eurozone, while shares of Samsung Electronics Co. (SSNLF $800) rose modestly after it reported better-than-expected profits on growth of its smartphone business, but earnings in its chip and flat-panel screens units declined. Elsewhere, Australia's S&P/ASX 200 Index increased 2.3% and the Hong Kong Hang Seng Index rallied 3.1%, while Taiwan's Taiex Index rose 1.1%, after a report showed the nation's trade surplus narrowed more than expected as imports outpaced exports, but both came in stronger than expected for September. Finally, China's Shanghai Composite Index remained closed for a holiday and will return to trading on Monday.
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