LIVE MARKETS-U.S. stock futures little changed, yields rise, after latest jobs release

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U.S. STOCK FUTURES LITTLE CHANGED, YIELDS RISE, AFTER LATEST JOBS RELEASE

The main U.S. equity index futures are not moving much after the release of the latest data on U.S. employment. E-mini S&P 500 futures EScv1 are now up around 0.2% vs a gain of about 0.1% just before the data came out.

The June nonfarm payroll headline jobs number was 147k vs the Reuters Poll calling for 110k. The prior headline jobs read for May was revised up to 144k from 139k.

The June unemployment rate was 4.1% vs a 4.3% estimate and the prior read of 4.2%.

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

Initial jobless claims were 233k vs a 240k estimate.

Additionally, the May international trade balance was -$71.5 billion as opposed to the Reuters Poll calling for -$71.0 billion:

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 July 29-30 FOMC meeting has risen to around 95% vs 77% just before the data was released. The chance that the FOMC cuts rates by 25 basis points (bps) is now around 5% vs 23%.

Looking further out into 2025, the market is showing a bias for the next Fed rate cut to occur in September. However, it is now tilting toward just one more cut, in December. Through year-end, interest rate probabilities are now calling for a total of around 53 bps of cuts.

The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.33%. It was around 4.27% just before the numbers came out. The yield ended Wednesday at 4.293%.

A majority of S&P 500 index .SPX sector SPDR ETFs are quoted higher in premarket trade with healthcare XLV.P, up only about 0.4%, posting the biggest gain. Utilities XLU.P are ticking down.

The SPDR S&P regional banking ETF KRE.P is up around 0.8%.

Regarding the jobs data, Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said:

"It’s nice to go into a holiday with a beat on the headline payroll number and wage gains positive, but moderate. The large increase in the number of discouraged workers is disappointing. This is after a sharp increase in job openings, so there’s a disconnect between employers and potential employees that needs to be resolved."

Jacobsen added "Those who have been without work the longest are also those having the hardest time finding work. With the diffusion index below 50, job gains are unfortunately narrowing."

May factory order data is due at 10:00 a.m.. The expectation is for an 8.2% rise vs a 3.7% decline for the prior read. June ISM non-manufacturing PMI is expected at 50.5 vs the 49.9 prior print.

Here is a premarket snapshot from around 08:51 a.m. EDT:

(Terence Gabriel, Chuck Mikolajczak)

EARLIER ON LIVE MARKETS:

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TRADE OPTIMISM GIVES WAY TO CAUTION OVER US JOBS CLICK HERE