US open: Stocks rise as NFP beats forecasts

US futures

Dow futures +0.13% at 36177

S&P futures +0.24% at 4690

Nasdaq futures +0.15% at 16371

In Europe

FTSE +0.23% at 7302

Dax +0.09% at 16048

Euro Stoxx +0.64% at 4368

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NFP beats but enough to move the Fed?

US stocks are heading higher with all three indices on track for a winning week in the week that the Fed started tapering bond purchases and non-farm payrolls beat expectations.

The non-farm payroll report revealed that 531k jobs were added in October. Expectations had been for 425k. September’s headline figure was also revised higher to 310k from 194k.. Meanwhile the unemployment rate ticked lower to 4.6%, down from 4.8% beasting forecasts. Perhaps the one area which wasn’t as impressive was the participation rate which stayed steady at 61.6%. A number that the Fed have said that they want to see improve.

The data comes after Fed Chair Jerome Powell said earlier in the week that the Fed are waiting for further improvements in the labour market in order to start raising interest rates. Whilst the data is definitely moving in the right direction it is unlikely to prompt a move yet by the Fed.

Earnings will remain in focus with several big names making the headlines. Peloton is trading 30% lower premarket after slashing full year guidance as safety concerns and gyms re-opening hit demand.

Uber will also be in the spotlight reporting its first profitable quarter after launching more than a decade ago.

Where next for Nasdaq?

The Nasdaq is extending gains to fresh all-time highs. The price is extending a rebound from 14600, and is currently testing rising trendline resistance dating back to August last year. The RSI is firmly in overbought territory so consolidation or an easing of the price could be on the cards. It would take a move below 15725 to negate the near term up trend.

FX – USD extends gains, GBP eyes 2021 low

The USD is pushing higher following the better than expected NFP. This was an upbeat report which would be a step in the right direction towards a Fed rate rise, eventually. 

GBP/USD is diving lower extending losses approaching the 2021 low after the BoE unexpectedly voted to keep interest unchanged. Given the high expectations the selloff has been extensive. Although the RSI is still not in oversold territory

 

Oil set for 5% declines across the week

Oil has pared earlier gains and trades just mildly higher on the day WTI has slipped below $80 and is due to lose over 5% across the week. Oil has dropped sharply this week despite OPEC+ decision to stick to its original output increase, raising oil production by just 400,000 barrels a day from December. OPEC is concerned of a supply glut next year.

Looking ahead the baker hughes rig count will be in focus

WTI crude trades +0.65% at $78.68

Brent trades +0.4% at $805.58

Learn more about trading oil here.

 

Looking ahead

17:00 Baker Hughes Rig Count