Bulls stirring before payrolls data
Stocks are climbing this morning before the release of key jobs
S&P 500 futures are up 0.4 percent, while most European markets are up about 1 percent. Asia was mixed in the overnight session, with Tokyo and Hong Kong up slightly but Shanghai and Seoul ending lower.
The Labor Department announces December non-farm payrolls at 8:30 a.m. ET. Economists are looking for the addition of 197,000 jobs and a 7 percent unemployment rate. Investors are mainly concerned that especially strong numbers will induce the Federal Reserve to remove monetary stimulus sooner rather than later. But such fears have existed for months and the Fed already started tapering bond purchases, so the news may already be priced in.
Equities are in the midst of their strongest run in years as the economy continues to improve and capital returns to the market. No single group or sector has dominated performance, though the last week has seen renewed buying in health care, financials, airlines, and tire makers . Internationally, our researchLAB market scanner shows sentiment shifting in favor of Europe and away from emerging markets such as China.
Going forward, attention will turn to earnings. Major banks including JP Morgan, Wells Fargo, Bank of America, Citigroup, Goldman Sachs, and Morgan Stanley all report earnings next week. Intel and General Electric are also on the docket.
Another recent trend has been weakness in retailers, especially those targeting lower-end shoppers. Sears Holding and Five Below both pre-announced weak fourth-quarter results yesterday afternoon and are down more than 10 percent this morning. Gap and Abercrombie & Fitch, however, climbed on strong reports. Indian outsourcing company Infosys rose 3 percent after beating expectations and raising guidance. Alcoa is down 6 percent after missing estimates.
Commodities are mostly higher. West Texas Intermediate crude oil is up more than 1 percent while Brent crude has advanced by about half a percent. Gold, silver, and copper are posting smaller gains. Agricultural products are mixed.
The main theme in currency markets is modest weakness in the Japanese yen.