US pre-open: Stock futures slide on early rate hike worries post payrolls

LONDON (ShareCast) – US stock futures fell after the release of the February non-farm payrolls report which smashed estimates on the headline front. Traders cite the strong release pushes rate hike expectations forward as the driver behind the decline in US stock futures.

After the release of the payrolls data, the S&P500 front month futures contract slid 0.3% to 2092.2 while the Dow Jones Industrial Average contract dropped 0.2% to 18065.

Both contracts were in the black before the release of the jobs data which was reportedly said to be delayed due to the severe weather conditions in the East Coast of the US.

Traders say the numbers push a rate hike by the Federal Reserve forward by early as July as 295,000 jobs generated on the headline front blew the doors off the consensus estimates of 235,000 jobs and January’s reading of 239,000.

The unemployment rate nudged lower to 5.5% versus estimates of 5.6% and below 5.7% in January, as a result of the participation rate dropping again from 62.9% to 62.8%.

Digging deeper into the numbers, the change in average hourly earnings came in at 0.1%, missing expectations of 0.2%, and sliding from 0.5%. For the Fed, that may be enough to hold back from raising rates until average earnings pick up in a decent manner to truly reflect the improvement in the labour market.

In FX markets, the US dollar surged against the euro and the British pound after the jobs report. The greenback spiked to 1.2% to change hands with the euro at 1.08 per dollar, its weakest level since 2004. Against the pound, the dollar rose to 0.8% to trade at $ 1.51.

In company news, retailer Staples (NasdaqGS: SPLS – news) reported lower-than-expected fourth-quarter sales, hurt by a strong dollar and weak demand for electronics however the company did post better-than-expected profit.

You may also like...

Rules of Discussion on US pre-open: Stock futures slide on early rate hike worries post payrolls

1. This forum is for discussion of financial markets. Please respect others view even if they are contrary to you.
2. Member's comments should lead to value addition in forum discussion.
3. If anyone is found making repetitive Explicit/Abusive/Racial comments, his account shall be banned and old posts will be deleted.
4. Providing Advice/Recommendations/Tips is fine but it should be free. Members cannot ask to be paid for it. Paid Advice is strictly prohibited
5. Spam links are not allowed. Too much promotion or using Contact info in ID will lead to account ban.
IMP : Members are requested to flag any violations to keep Forum Clean.
Loading comments …