Futures vs FV: SP +15.27; DJ +131.52; +53.72
DJ futures were up 49 points pre-jobs thanks to an EU/UK Brexit agreement, worked nicely higher after, and holding the gains toward the open.
Non-Farm jobs: 228K vs 190K v 247K prior (from 261K)
Unemployment rate steady at 4.1%
Wages: 0.2% vs 0.3% exp vs -0.1% prior (from 0.0%)
Wages year/year: 2.5% vs 2.7% expected. Wages disappointing given manufacturing jobs still improving, but retail jobs surged as well (holiday hires) and that offsets wage gains in the increasing better paying jobs.
Participation rate: 62.7%
Workweek: 34.5 vs 34.4 exp vs 34.4 prior. Not many talking about this, but it is very important to see it moving up. Now, can it hold?
Manufacturing jobs: +31K
Manufacturing unemployment rate: 2.6%. First time below 3% since the recession.
Bitcoin: Down today, showing very large swings as volatility picks up. It has formed a head and shoulders just in time for futures trading to start next week. Sellers will show up and give selling a shot.
Brexit: UK and EU reach agreement, ready to take talks to 'Phase 2.' That helped the futures rise even before the jobs report.
OTHER MARKETS
Bonds: 2.378% vs 2.362%. Bonds off again on future expectations
EUR/USD: 1.1766 vs 1.1772. Dollar up again against the euro
USD/JPY: 113.24 vs 113.09. Dollar still moving up
Oil: 57.64, +0.95. Solid rebound
Gold: 1250.50, -2.60. Still falling
Okay, futures are up sharply and the questions are 1) will they hold post-open, 2) will stocks rise together or will there still be favored and disfavored areas?
I note that DJ30 futures were at 141 but have slipped to 119 while NASDAQ futures are adding strength. That suggests similar action to Thursday where some of the big cap techs outperformed large cap NYSE. Maybe, but all are up nicely to get the session moving.
There are stocks we are still interested in, e.g. AMZN (+7 pre-market), LH, ORBK, SQ, AAP etc. We will see what kind of entries we get.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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