Stock market news: October 4, 2019 – Yahoo Finance

Stock News

Posted on October 4, 2019

U.S. stock futures turned around Friday morning after new job additions and wage gains in September missed expectations, but the unemployment rate fell to a fresh five-decade low.

Here were the main moves during the pre-market session, as of 8:50 a.m. ET:

S&P 500 futures (ES=F): +0.16%, or 4.75 points
Dow futures (YM=F): +0.22%, or 57 points
Nasdaq futures (NQ=F): +0.26%, or 20.25 points
U.S. crude oil prices (CL=F): +0.97% to $52.96 per barrel
10-year Treasury yield (^TNX): +0.7 bps to 1.543%
Gold (GC=F): -0.47% to $1,506.70 per ounce

Data released throughout the week underscored a growth slowdown that had broadened out across the U.S. economy. These results sent the three major U.S. stocks reeling: Even after accounting for the slight rebound in equity markets Thursday, the S&P 500 was still down 2.22% since the start of October.

Against this backdrop, the Department of Labor’s September jobs report sent mixed messaging over the pace of economic growth.

The U.S. economy added just 136,000 new payrolls in September, missing expectations for 145,000, according to Bloomberg-compiled estimates. Friday’s jobs report also saw August’s payroll additions revised up to 168,000, from the 130,000 previously reported. This brought the new three-month average for payroll additions between July, August and September to 119,000, or the lowest since 2012.

Meanwhile, the unemployment rate fell to a fresh five-decade low of 3.5%, the lowest since December 1969. Consensus economists had expected the unemployment rate to hold at 3.7% for a fourth consecutive month.

Average hourly earnings, however, were flat on a monthly basis. Hourly wages climbed just 2.9% over last year in September, versus consensus expectations for these to have risen 3.2% to match August’s rate.

Ahead of the September jobs report, ADP/Moody’s private employment print Wednesday showed that private employers added just 135,000 roles for the month, missing Bloomberg-compiled consensus expectations by 5,000. While the ADP/Moody’s survey has typically been an imprecise predictor of the absolute job gains in the “official” DOL report, it has captured a downtrend in private hiring growth also been reflected in the DOL releases over the course of this year.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., October 3, 2019. REUTERS/Brendan McDermid

The September jobs report comes three-and-a-half weeks before the Federal Reserve’s next rate-setting meeting. Market participants broadly expect policymakers will cut benchmark interest rates for a third time this year at the close of the meeting. A weaker jobs report, in combination with other softening data, could bolster the case for easier monetary policy.

“The question for markets is whether they should see the negatives of slowing growth or the positives of the more accommodative monetary policy stance the Fed would likely employ in response,” Joshua Mahony, senior market analyst at IG Group, wrote in a note. “While stock markets can take the positives of the possibility of lower rates, the dollar suffers at the hands of both looser monetary policy and a weaker economy. With growth fears driving a huge selloff in stocks, the U.S. jobs report provides the one critical release traders will be watching out for as a driver of sentiment as we close out the week.”

Thursday’s rebound in stocks came even after the Institute for Supply Management reported weaker-than-expected growth in U.S. service-sector activity. While the release triggered an immediate sell-off in stocks – as had a report earlier in the week showing deteriorating domestic manufacturing activity – equities did return to the green shortly thereafter, which many took as a sign of increased expectations that the Fed would step in to lower rates amid the negative data.

Federal Reserve speakers including Boston Fed President Eric Rosengren, Atlanta Fed President Raphael Bostic and Fed Chair Jerome Powell are set to deliver public remarks Friday after the release of the jobs report. Their comments could offer further insight into how the print – whether a beat or miss – fits in with other indicators to tilt their thinking toward easier or unchanged monetary policy.