U.S. Stocks May See Initial Weakness Following Disappointing Jobs Data

After ending yesterday’s lackluster session modestly lower, stocks may see further downside in early trading on Friday. The major index futures are currently pointing to initial weakness on Wall Street, with the Dow futures down by 66 points.

The futures have slid following the release of a closely watched Labor Department report showing much weaker than expected U.S. job growth in the month of December.

The report said non-farm payroll employment rose by 199,000 jobs in December after climbing by an upwardly revised 249,000 jobs in November.

Economists had expected employment to jump by 400,000 jobs compared to the addition of 210,000 jobs originally reported for the previous month.

Despite the weaker than expected job growth, the unemployment rate slid to 3.9 percent in December from 4.2 percent in November. The unemployment rate was expected to edge down to 4.1 percent.

With the bigger than expected decrease, the unemployment rate fell to its lowest level since hitting 3.5 percent in February of 2020.

The disappointing jobs data may lead to renewed concerns about the economic impact of the Omicron variant of the coronavirus.

Following the hawkish tone of the latest Federal Reserve minutes, traders may worry the central bank is scaling back stimulus at a time of slowing economic growth.

The minutes suggested the Fed could begin raising interest rates and shrinking its balance in the near future in an effort to combat elevated inflation.

Following the sell-off seen late in Wednesday’s session, stocks showed a lack of direction over the course of the trading day on Thursday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing in negative territory.

The Dow slid 170.64 points or 0.5 percent to 36,236.47, pulling back further off the record closing high set on Tuesday. The Nasdaq dipped 19.31 points or 0.1 percent to 15,080.87 and the S&P 500 edged down 4.53 points or 0.1 percent to 4,696.05.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. China’s Shanghai Composite Index slipped by 0.2 percent, while Hong Kong’s Hang Seng Index jumped by 1.8 percent.

The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is up by 0.1 percent, the German DAX Index and the French CAC 40 Index are both down by 0.5 percent.

In commodities trading, crude oil futures are climbing $0.75 to $80.21 a barrel after surging $1.61 to $79.46 a barrel on Thursday. Meanwhile, after plunging $35.90 to $1,789.20 an ounce an ounce in the previous session, gold futures are falling $4.70 to $1,784.50 an ounce.

On the currency front, the U.S. dollar is trading at 115.78 yen versus the 115.83 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1303 compared to yesterday’s $1.1295.

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