Stocks Tick Higher Ahead of Jobs Report — Update
Economists expect 179,000 new jobs were added in August
— Nikkei ends six-week losing streak
— Dollar, bond yields steady
Stocks started the month a touch higher Friday ahead of the U.S. jobs report, a key gauge of the world’s largest economy.
Futures pointed to a 0.1% opening gain for the S&P 500 after strong economic data helped push U.S. stocks higher on Thursday. Japanese and Australian stocks advanced modestly, echoing the higher finish on Wall Street, while the Stoxx Europe 600 rose 0.5% in morning trading after posting a third consecutive monthly decline in August.
Many investors have said they would be watching Friday’s wage growth figures to gauge the outlook for monetary policy in the months to come. Despite low unemployment and steady job creation, earnings have been stuck at a modest rate for a long time, drawing caution from policy makers.
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“You’re not getting a lot of wage growth,” said Anish Chopra, equities and fixed-income specialist at Portfolio Management Corp. “If you look at what the Fed can do, I don’t think there’s much more room they have to move up [rates], because there’s very little inflation that’s out there,” he said.
Investors currently see just a roughly 37% chance of a rate rise by the end of December, according to Fed-funds futures tracked by CME Group.
That has also kept yields on long-dated government bonds in check. Yields on 10-year Treasurys were steady Friday at 2.123% from 2.122% on Thursday, while their German counterparts fell to 0.356% from 0.363%. Yields move inversely to prices.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, edged up 0.1% on Friday, on track for a small weekly gain, but down significantly on the year.
In European stocks Friday, shares of Volvo AB climbed 6.3%, leading gains in the region after the auto maker announced it was targeting operating margins over 10%.
Shares of drug addiction treatment developer Indivior PLC fell 39% after it said a U.S. court founds treatments haven’t infringed its patents.
The euro edged down 0.1% to $1.1893 early Friday, helping alleviate pressure on European stocks. Investors pulled the most from European equity funds since February in the week through Wednesday amid concerns about this month’s meeting of the European Central Bank and a recent climb in the euro to a 2 1/2 year high, according to fund-tracker EPFR Global.
“The ECB is getting in a bit of a bind given the strength of the euro,” said Kirk Hartman, global chief investment officer at Wells Fargo Asset Management. “As an export driven economy, you worry about the impact of a strong currency,” he said.
Earlier, Asian shares mostly inched higher, with China gaining slightly after a private gauge of Chinese factory activity rose for the third straight month in August. The Shanghai Composite Index was last up 0.2%, while stocks in Shenzhen added 0.6%.
“Sentiment is positive in China,” said Will Leung, head of investment strategy at Standard Chartered Wealth Management. He noted people are optimistic that Chinese economic data due next week will also show improvement after a soft batch of readings for July.
Japan’s Nikkei Stock Average was up 0.2% amid gains in energy companies. The index ended a six-week losing streak, its longest since early 2014.
Australia’s S&P ASX 200 edged up 0.2%, led by health care shares, while markets in Singapore, Indonesia, Malaysia and the Philippines were closed Friday for a holiday.
-Rory Gallivan contributed to this article.
Write to Riva Gold at email@example.com and Lucy Craymer at Lucy.Craymer@wsj.com
(END) Dow Jones Newswires
September 01, 2017 05:09 ET (09:09 GMT)