U.S. equity futures edged into the green Friday, while Treasury note yields leapt to the highest levels since early June, as investors moved past concern over the debt ceiling to prep for what could be the most important jobs report of the year later in the session.
A Senate deal that allowed for a temporary $480 billion addition to the debt ceiling, taking it to $28.9 trillion, will move to the House for a floor vote next week and push the entire debate into early December.
The agreement — which passed the upper chamber by a vote of 50-48 — triggered the largest single-day rally in global stocks since May and put Wall Street firmly into the green at the close of trading.
Traders now will navigate details of the September jobs report — following stronger-than-expected readings on private sector hiring from ADP and weekly applications for unemployment benefits from the Commerce Department — that could trigger near-term changes to the Federal Reserve’s bond purchasing program and the broader U.S. interest rate picture.
U.S. employers likely added around 500,000 net new jobs to the world’s biggest economy last month, according to the Street consensus forecast for today’s report, a level that could trigger the first changes to the pace of the Fed’s $120 billion in monthly bond purchases.
Fed Chairman Jerome Powell told reporters last month that it wouldn’t take a knockout or super-strong employment report,” to begin slowing the pace of purchases, which analysts suggest could last for around 8 months before the entire program is exhausted. From there, the first rate hike is likely to come in September of 2022.
On Wall Street, futures contracts tied to the Dow Jones Industrial Average are indicating a modest 40 point opening bell bump ahead of non-farm payroll report at 8:30 am Eastern time, while the broader S&P 500 is priced for a 3 point move to the downside . Nasdaq Composite futures, meanwhile, are set for a 10 point gain as benchmark 10-year note yields eased to 1.585% in early New York trading.
Energy markets, however, continue to test market bulls as oil approaches the highest levels in seven years again Friday amid the rolling power crunch — and natural gas prices surges — in Europe and China.
WTI futures for November delivery were marked 63 cents higher on the session at $78.93, less than a $1 from their seven-year high of $79.54, while Brent contracts for December, the global benchmark, were last seen 56 cents higher at $82.51 per barrel.
Tesla (TSLA) – Get Tesla Inc Report shares were an active pre-market mover, rising 0.13% to $794.61 each after founder and CEO Elon Musk unveiled plans late Thursday to move the clean-energy carmaker’s headquarters from California to Texas, the site of its developing gigafactory and the home of SpaceX.
Musk also said he hoped the global shortage in semiconductors “will alleviate soon”, adding he was confident of adding to the carmaker’s record third quarter delivery total.
Apple (AAPL) – Get Apple Inc. (AAPL) Report shares were also on the move, rising 0.08% to $143.41 after the iPhone maker’s main rival, Samsung Electronics, forecast its strongest quarterly profit in three years thanks in part to a surge in global semiconductor prices and solid demand of its new foldable smartphone.
In overseas markets, Europe’s Stoxx 600 edged 0.2% lower in a muted session as investors eyed the non-farm payroll report at 1:30 PM Frankfurt time, while China shares gained on their first trading session following the Golden Week holiday to help the region-wide MSCI ex-Japan index gain 0.2% heading into the final hours of trading.