US open: Stocks rise after Goldilocks job report

US futures

Dow futures +0.62% at 31850

S&P futures +0.8% at 4005

Nasdaq futures +0.83% at 12450

In Europe

FTSE +1.6% at 73283

Dax +2.4% at 12960

Euro Stoxx +1.7% at 3670

NFP’s rise to 315k

US stocks are charging higher after the Goldilocks jobs report. 315K jobs were added in August, roughly in line with forecasts (300K) when the downward revision from July is taken into account.

Unemployment ticked higher to 3.7% up from 3.5% as the participation rate also moved higher. The rising cost of living has seen more people return to the workforce, easing pressures and keeping wages steady. Average wages came in below forecasts at 5.2%.

The market is a solid report which is starting to show what the Fed wants to see. Solid job growth but cooling wage pressures as more of those earlier retirees from the pandemic start working again.

US stocks have jumped higher, and the USD has eased lower following the report. These moves suggest that the market is tempering hawkish Fed bets on the basis on this report.

That said the Fed will still be debating whether to hike by 50 or 75 basis points in September. This report didn’t cement the 75 bp hike as the market feared.

Corporate news:

Lululemon Athletica rises 9.7% after the retailer raised its full year outlook, as demand among high income shoppers remains strong even as inflation soars.

Broadcom rises after the semiconductor company forecast strong Q4 revenue, expecting that demand from businesses going digital even with a likely chip slowdown.

Where next for the NASDAQ?

FX markets – USD falls, EUR rises

The USD is falling after the non-farm payroll, which has calmed extreme hawkish Fed bets.

EUR/USD is heading higher boosted by hotter than expected PPI which rose to 37.9% YoY in July, up from 36% in June. News that gas flows through Nord Stream 1 have resumed is also supporting the price.

GBP/USD has had a tough time of late. Rising recession fears have dragged the currency lower across the week to a 2.5 year low yesterday. Looking ahead, Monday see the New UK prime minister announced.

Oil rises ahead of OPEC+ meeting on Monday

Oil prices are heading cautiously higher, snapping a three day losing run, helped higher by the improving mood in the market and as investors look ahead to the OPEC+ meeting on Monday

OPEC+ will meet to discuss its production plans for the coming month and do so as China locks down more cities as COVID spreads and as concerns of a global economic slowdown intensify.

Concerns over China and softer global demand have pulled oil prices over 5% lower this week. Meanwhile, these same reasons could give OPEC+ motive to slash oil output.

Saudi Arabia proposed the idea of a production cut to stabilise volatile prices amid a disconnect between the futures market and the physical market. Crude oil now trades around 30% off the June highs.

WTI crude trades +2.9% at $88.96

Brent trades +3% at $95.15

Looking ahead

18:00 Baker Hughes rig count