LIVE MARKETS-US stock futures, yields rise after latest jobs report

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U.S. STOCK FUTURES, YIELDS RISE AFTER LATEST JOBS REPORT

The main U.S. equity index futures are higher after the release of the latest data on U.S. employment. E-mini S&P 500 futures EScv1 are now up more than 1% vs a gain of about 0.5% just before the data came out.

The April nonfarm payroll headline jobs number was 177k vs the Reuters Poll calling for 130k. The prior headline jobs read for March was revised down to 185k from 228k.

The April unemployment rate was 4.2% vs a 4.2% estimate and the prior read of 4.2%.

Wage data, on a month-over-month- and year-over-year- basis was cooler-than-expected:

According to the CME's FedWatch Tool, the probability that the Fed sits on its hands and leaves its current target rate of 4.25%-4.50% unchanged at its May 6-7 FOMC meeting has edged up to around 99% vs 95% just before the data was released. The chance that the FOMC cuts rates by 25 basis points (bps) is now around 1% vs 5%.

Looking further out into 2025, the market is showing a bias for the next Fed rate cut to occur in July (from June prior to the release of the data). Through year-end, interest rate probabilities are calling for a total of about 85 bps of cuts this year.

The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.29%. It was around 4.23% just before the numbers came out. The yield ended Thursday at 4.231%.

All 11 S&P 500 index .SPX sector SPDR ETFs are quoted higher in premarket trade with financials XLF.P, up around 1.5%, posting the biggest gain.

The SPDR S&P regional banking ETF KRE.P is up about 2%.

Regarding the jobs data, Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute in Charlotte, NC, said:

"We've reached a steady state for the labor market. Until something more meaningful changes with respect to the supply or demand for labor it’s fair to say that it’s going to just keep chugging along."

Samana added "If anything, it probably reinforces the Fed's stance of being on hold for longer because continued steadiness in the labor market is what they're pointing to as the reason why it might take them some time to cut."

Here is a premarket snapshot from around 08:55 a.m. EDT:

(Terence Gabriel, Sinéad Carew)

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