(Reuters) – Futures linked to Wall Street’s major indexes were largely flat on Friday, with investors cautious ahead of a monthly jobs report expected to be key in assessing the Federal Reserve’s interest rate trajectory.
US job growth is likely to have risen sharply in November after being severely curtailed by hurricanes and strikes, but this is unlikely to signal a material shift in the easing of labor market conditions that the Fed will need this month to interest rates to be reduced again.
“The recent Fed speakers have taken pains to leave all options open in December and the decision remains too close,” said Max McKechnie, global market strategist at JPMorgan Asset Management.
“However, if we get strong payroll data today, revisions to the Fed’s projected interest rate path for next year are all but guaranteed.”
Data as of 8:30 a.m. shows nonfarm payrolls likely rose by 200,000 jobs last month, while the unemployment rate is expected to rise to 4.2%, according to a Reuters survey of economists.
Right now, traders see a nearly 67% chance that the Fed will cut rates by 25 basis points at its meeting later this month, according to CME’s FedWatch Tool.
A preliminary reading of US consumer confidence in December, calculated by the University of Michigan, will also be released shortly after markets open on Friday.
Four Fed officials will make public appearances throughout the day, just before a media blackout begins Saturday for the Fed’s Dec. 17-18 policy meeting.
US stocks closed lower in the latest session, with UnitedHealth falling sharply and technology stocks giving up some gains after a steady rise throughout the week.
Despite Thursday’s pullback, the S&P 500 and Nasdaq were poised for their third straight weekly gains, while the blue-chip Dow was set for minor losses.
The three indexes are hovering around record highs as a brutal rally in heavyweight tech stocks – an attempt to capitalize on the artificial intelligence hype – has led to robust gains all year.
Newly elected US President Donald Trump’s victory in the November 5 election was another recent tailwind for stocks. Analysts expect his policies on tax cuts and looser regulations could support business performance.
At 5 a.m. ET, the Dow E-minis fell 15 points (0.03%), the S&P 500 E-minis fell 3.5 points (0.06%) and the Nasdaq 100 E-minis fell 1. 5 points (0.01%).
Among early pre-market movers, Ulta Beauty rose 11.4% after the cosmetics retailer raised its annual profit forecast, signaling a revival in demand for perfumes and makeup during the holiday shopping season.
