Global Markets Bounce Ahead of the NFP Report

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Includes: ACWI, DIA, SPY
by: The LFB

Current Futures: Dow -24.00, S&P -2.60, NASDAQ -3.75

Global markets are moving lower ahead of the U.S. labor market data, which is likely to show that the economy continued to lose jobs, but at a slower pace.

Almost all European stock markets are heading lower on Friday, ahead of the infamous NFP report. The mature European markets, located in Western and Central Europe, lost approximately 1%, while the smaller Eastern European markets tumbled close to 2% so far. Earlier in the day, the Japanese Nikkei managed to reverse a 1% decline during the last few hours of trading, but unfortunately, this rally was not seen through the rest of the Asian region. The Hang Seng and the Shanghai markets closed 2.50% and respectively 2.85% lower, as traders take their profits in the Chinese shares after an 80% run from the beginning of the year.

The S&P index traded below the 995.00 area during the overnight hours, which acted as an important price point over the last few trading sessions. From a technical point of view, the market is overextended and because it broke below the previous support area, it may be setting up to retrace some of its recent gains, temporarily entering back into a bear market.

Ahead, the market is preparing for the infamous NFP report, which is expected to show that the U.S. economy lost 320K jobs in July, the least since October 2008. Moreover, if these projections are true, July’s job losses will be half of what the U.S. economy lost in February and March, indicating that the decline in the labor market may have reached its peak.

Overnight, the U.K. FTSE fell 46.04 points (0.98%) to 4,644.49, while the German Dax declined 23.12 points (0.43%) to 5,346.86.

Crude oil for August delivery was recently trading at $71.05 per barrel, down by $0.80.

Gold for August delivery was recently trading lower by $0.20 to $962.90.

Disclosure: No positions