Down Debt

US futures towers over key jobs data, after debt ceiling deal raises stocks

Corporate profits consistently beat Wall Street estimates in the second quarter.
  • US futures struggled to move as traders waited for the release of nonfarm wage data.
  • A solid gain in September could give the Fed the green light to start reducing its support for the economy.
  • Shares rose Thursday after Democrats and Republicans agreed to extend the debt ceiling until December.
  • See more stories on the Insider business page.

US futures struggled to move on Friday, after stocks rose sharply the day before when Republicans and Democrats struck a deal to raise the debt ceiling until December.

Investors were awaiting monthly data on non-farm wages in the United States, due on Friday. Unemployment is expected to fall, increasing the chances that the Federal Reserve will begin to reduce its support for the economy in November.

S&P 500 futures were down 0.16%, while Dow Jones futures were down 0.12%. Futures contracts for the technology-intensive Nasdaq 100 fell 0.26%.

European stocks fell, with the continent-wide Stoxx 600 shedding 0.46%. In Asia overnight, China’s CSI 300 climbed 1.31% after reopening after a holiday, while Japan’s Nikkei 225 rose 1.34%.

Investors were applauded by the Senate’s deal to raise the US debt ceiling, avoiding the possibility of the country defaulting on its debts. However, the extension only lasts until December, setting up another fight.

“Together with [Treasury Secretary] Janet Yellen, investors breathed a sigh of relief on Thursday, ”said Chris Scicluna, head of research at Daiwa Capital Markets.

The debt deal, along with a drop in weekly jobless claims in the United States on Thursday, helped boost bond yields, with investors betting an improvement in the labor market would prompt the Fed to start “cutting back “its asset purchases soon.

The yield on the 10-year US Treasury bill rose 2.5 basis points to 1.596% on Friday, its highest level since June. Yields move in the opposite direction to prices. The dollar index climbed remained stable at 94.21, around its highest level in over a year.

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Bonds and the dollar strengthened, with investors betting that the Fed will cut stimulus, especially the rate at which it buys bonds. Less bond market support should lower prices and raise yields, making bonds more attractive and pushing the dollar higher.

The Fed and investors will be watching the nonfarm payroll figures closely on Friday morning US time. Analysts expect the US economy to add 500,000 jobs in September, up from 235,000 in August.

“The US employment data today should give the Fed the final green light to announce the reduction in its asset purchases at the next FOMC meeting in November,” said Antoine Bouvet, of the Dutch bank ING, in a note.

Elsewhere, oil prices have continued their seemingly unrelenting rise as a global energy crisis shakes economies around the world. Natural gas prices have jumped more than 500% in Europe and are rising sharply in Asia, pushing users to turn to oil as a substitute for power generation, for example.

Brent crude, the global benchmark, rose 1.12% to $ 82.97 per barrel, while WTI crude was 1.17% higher at $ 79.20 per barrel.

In the crypto world, bitcoin rose 2.62% to $ 55,601, after trading at around $ 41,000 a week earlier. Bitcoin fans rejoiced at the cryptocurrency’s hijacking of stocks, which reached a rocky area. JPMorgan suggested that institutional buyers were grabbing bitcoin instead of gold as inflation rose.

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