U.S. stocks are priming for a narrowly mixed start ahead of the all-important non-farm payrolls data, an important piece of economic evidence the Federal Open Market Committee would consider while deliberating on the Fed funds rate next week. The May consumer price inflation report is due only Tuesday just ahead of the rate decision.
Tamer-than-expected job numbers and benign average hourly earnings could give hopes for at least a dovish message from the central bank and a benign dot-plot curve. The futures market currently prices in a 97.7% probability of a pause decision next week. Meme stock volatility could also create some volatility in the market.
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.04% |
| S&P 500 | -0.05% |
| Dow | -0.02% |
| R2K | -0.30% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY edged down 0.06% to $534.32, while the Invesco QQQ ETF QQQ traded up 0.03% at $463.50, according to Benzinga Pro data.
Cues From Previous Session:
Wall Street ended narrowly mixed as traders digested the previous session’s advance that took the S&P 500 and the Nasdaq Composite to record highs. Traders also exercised restraint ahead of the non-farm payroll data. The 30-stock Dow Jones Industrial Average ended modestly higher, while the Nasdaq Composite and the S&P 500 Index edged down.
Small-cap stocks underperformed despite a pick up in buying interest in meme stocks following GameStop Corp. GME news.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.09% | 17,173.12 |
| S&P 500 Index | -0.02% | 5,352.96 |
| Dow Industrials | +0.20% | 38,886.17 |
| Russell 2000 | -0.70% | 2,049.44 |
Insights From Analysts: Fund manager Louis Navellier lamented the concentration of the market rally. “Momentum remains positive, but concentration is high,” he said. The Equal-Weighted S&P 500 Index has underperformed its market cap-weighted compatriot, he noted.
Carson Group’s Ryan Detrick, meanwhile, is upbeat about the near term. He noted that in an election year, June, July, and August are typically the best-performing months.
Upcoming Economic Data:
- The Bureau of Labor Statistics is due to release the non-farm payrolls report for May at 8:30 a.m. The non-farm sector is widely expected to add 190,000 jobs in May, up from 175,000 in April. The jobless rate may have remained unchanged at 3.9% and the annual change in the average hourly wages, an inflation measure, is expected at 3.9%, flat with a month ago.
- The Commerce Department will release its wholesale inventories report at 10 a.m. EDT. Economists, on average, expect month-over-month wholesale inventories growth of 0.2%, reversing the 0.4% drop in March.
- The Federal Reserve’s consumer credit report for April, due at 3 p.m. EDT, is expected to show a $10.2 billion increase in outstanding consumer credit compared to a $6.3 billion increase in March.
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Stocks In Focus:
- DocuSign, Inc. DOCU fell over 7.55% in pre-market trading following the company’s earnings announcement. Vail Resorts, Inc. MTN slumped about 8.5%, Samsara Inc. IOT plunged over 7.70% and Zumiez Inc. ZUMZ moved down about 3.50%.
- GameStop slid about 8% after the video game retailer’s surprise early earnings announcement, which showed a top- and bottom-line miss. The company also said it wouldn’t hold an earnings call. Fellow meme stock AMC Entertainment Holdings, Inc. AMC also pulled back sharply.
Commodities, Bonds And Global Equity Markets:
Crude oil futures climbed for a third straight session, while gold futures retreated sharply. The U.S. benchmark 10-year Treasury note rose 1.4 basis points to 4.295% after rising modestly on Thursday. Bitcoin BTC/USD was in the green above the $71K mark.
The Asian markets closed on a mixed note, with Japan, Hong Kong, Taiwan, Indonesia, and New Zealand retreating, while the rest of the major markets advanced. The Chinese market rose slightly as traders digested mixed trade data for May. While imports fell sharply in May, a sharp rise in exports helped the country record a bigger trade surplus for the month.
European stocks fell sharply in early trading amid profit-taking following the gains seen in the previous two sessions amid the region’s central bank’s decision to lower rates for the first time in about five years.
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