FX.co ★ Jobs Data, Apple Earnings May Lead To Extended Rally On Wall Street

The U.S. futures indices point to a strong opening on Friday, likely continuing with the momentum of the previous trading session. This comes after the latest Labor Department report indicated that U.S job growth in April was much lower than anticipated.

According to the Labor Department, non-agricultural payroll employment increased by 175,000 jobs in April, following an upwards revision of 315,000 jobs in March, falling short of economists' prediction of a 243,000 job increase from the original 303,000 reported in the prior month.

The update also revealed a slight upturn in unemployment rates, rising from 3.8% in March to 3.9% in April, despite expectations that it would hold steady. This data, paired with a steep decrease in treasury yields falling below 4.5%, is expected to alleviate concerns regarding the future trajectory of interest rates.

This positive sentiment is further bolstered by Apple, whose shares surged by 7.2% in pre-market trading following the announcement of better-than-expected second-quarter fiscal results and the company's decision to repurchase $110 billion worth of stocks.

Thursday's trading session reflected considerable market fluctuations, but ended significantly higher. The Dow increased by 322.37 points (0.9%), the Nasdaq rose by 235.48 points (1.5%), and the S&P 500 climbed by 45.81 points (0.9%).

Traders found relief in the aftermath of Wednesday's Federal Reserve monetary policy announcement, as it alleviated worries about potential interest rate hikes. Fed Chairman Jerome Powell provided reassurance, stating that he believed the next move would be a rate cut, albeit one that might take longer than previously anticipated.

Labour costs saw a significant surge in Q1 2024, according to the Labor Department, cashing a 4.7% rise after remaining level in Q4. This was higher than the expected 3.2% increase. Oren Klachkin, a Financial Markets Economist at Nationwide, remarks that this strong rise in labor costs is indicative of persisting high inflation pressures.

Other noteworthy movements include transportation stocks which saw a 2.5% spike, while semiconductor stocks grew by 2.2% and retail stocks by 2.0%. Certain sectors like housing, computer hardware, and brokerage also witnessed considerable strength, although pharmaceutical stocks deviated from the upward trend.Crude oil futures have risen by $0.54 to $79.49 a barrel after previously dipping by $0.05 to $78.95 a barrel on Thursday. Gold futures are also experiencing an upward trend, rising $16.50 to $2,326.10 an ounce from $2,309.60 an ounce during the last trading session.

In currency trading news, the U.S. dollar now stands at 152.07 yen compared to Thursday's 153.64 yen closing rate in New York. It's also valued at $1.0802 against the Euro, a modest increase from yesterday's $1.0725.

Asian stocks showed promising growth on Friday, with tech shares spearheading the upward movement largely due to Apple's impressive quarterly earnings and larger buyback program. But trading volumes were in the lower end due to market holidays in mainland China and Japan.

The Dollar Index was nearing a three-week low, as market analysts eagerly await key U.S. jobs data. Gold fell below the $2,300 per ounce mark and seemed headed towards its first consecutive weekly losses in over two months, stemming from concerns over prolonged U.S. interest rates.

Meanwhile, oil prices witnessed a slight increase, although they are projected to witness a weekly loss due to decreased tensions in the Middle East and signs of weak U.S. demand.

Hong Kong's tech-focused Hang Seng Index rose by 1.5 percent to 18,475.92, continuing a nine-day positive trend. Here, property developers are doing well thanks to potential stimulus measures being predicted. The Kospi in Seoul edged slightly lower by 0.3 percent to 2,676.63, despite Naver's shares leaping over 3 percent due to strong first-quarter earnings.

Australian stocks closed on a high note for the second consecutive session, particularly the rate-sensitive banks and real estate stocks, ahead of the Reserve Bank of Australia's upcoming monetary policy decision.

However, gold miners faced heavy losses, with Evolution Mining and St Barbara suffering major losses of 5.6 percent and 7.7 percent, respectively. Macquarie Group shares also fell 2.2 percent following the bank's announcement of annual earnings that fell short of estimates.

In New Zealand, the S&P/NZX 50 Index ended 0.5 percent higher at 11,938.08, marking its second week of consecutive growth.

Looking towards Europe, stocks have risen following European Central Bank policymaker Yannis Stournaras' projection of three rate cuts in 2024. Encouraging earnings updates and improved growth in U.K. services sector have bolstered investor sentiment.

Henkel AG & Co. KGaA, a German household and personal products business, has seen a spike in shares after uplifting sales and earnings outlook for 2024. Despite some narrow losses, Credit Agricole and Societe Generale have performed well. Anglo American has also surged after rumors of a potential competing bid from Glencore. Daimler Truck Holding, on the other hand, has seen a slump in share prices.

Lastly, the U.S. Labor Department has reported weaker-than-expected job growth for April, with non-farm payroll employment rising by 175,000 jobs, compared to an adjusted increase of 315,000 jobs in March.

Economists originally predicted a rise in employment by 243,000 jobs, in comparison to the unusually high surge of 303,000 jobs reported for the preceding month. April saw the unemployment rate slightly increase from March's 3.8 percent to 3.9 percent, against expectations for it to stay constant.

At 10 a.m. Eastern Time, the Institute for Supply Management is set to release its April report on the activity within the service sector. The ISM's services PMI for April was predicted to have a slight increase from 51.4 in March to 52.0, with a reading of above 50 demonstrating growth.

This evening, at 7:45 p.m. Eastern Time, John Williams, New York Federal Reserve President, and Austan Goolsbee, Chicago Federal Reserve President, are slated to feature in a panel before an event titled "Getting Global Monetary Policy on Track," organized by the Hoover Institution at Stanford University.

As for shares of note, Amgen (AMGN) is seeing notable gains in pre-market trading, following the biotechnology firm's first-quarter results that overshot analysts' estimates on both revenue and profits. Bock (SQ), a payment services provider, is also expected to see a positive start after reporting results for the first quarter that surpassed estimates.

Conversely, Cloudflare (NET) is experiencing notable pre-market decline, after announcing first-quarter results that surpassed expectations yet issued a full-year revenue guidance that left much to be desired. Also potentially facing a challenging day is online travel company Expedia (EXPE), after it reported better-than-expected revenue for the first quarter, yet lowered its full-year revenue forecast.