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[BRIEFING.COM] The stock market has continued its rebound off morning lows with the Nasdaq Composite inching into the green. The tech-heavy Nasdaq has shown relative strength since the start thanks to a rebound in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 310.92, +5.96) has spiked 2.0% and is now up 0.3% for the week after being down almost 8.0% at its lowest point on Monday. To be sure, the technology sector (unch) has also contributed to the rebound in the Nasdaq with large cap components like Google (GOOGL 643.35, +1.35), Facebook (FB 91.19, +0.24), and Microsoft (MSFT 44.69, +0.08) all showing gains close to 0.3% apiece. Unlike the Nasdaq, the S&P 500 (-0.2%) remains in the red amid considerable weakness in the financial sector (-1.7%). 11:55 am: [BRIEFING.COM] Not much change in the market as the key indices continue hovering near their rebound highs. The S&P 500 remains lower by 11 points after recovering 19 points over the past two hours. Biotechnology has been largely responsible for the recovery off morning lows, but there are still a few soft spots in the market. Most notably, the financial sector is lower by 2.3%, extending this week's loss to 2.8%, which puts the economically-sensitive sector well behind other groups. The underperformance is understandable considering the sector has suffered from the dimming prospects of a rate hike taking place in 2015. The rebound in stocks has coincided with Treasuries backing away from their highs, but the 10-yr note remains in the green with its yield down nine basis points at 1.94%. 11:25 am: [BRIEFING.COM] The major averages have continued their rebound off session lows with the S&P 500 trimming its decline to 0.8%. Eight sectors remain in negative territory while energy (+0.2%) has recently joined health care (+0.3%) in the positive territory. The energy sector has been able to erase its loss even though crude oil remains lower by 1.2% at $44.19/bbl. Elsewhere among cyclical sectors, consumer discretionary (-0.8%), industrials (-0.7%), and financials (-2.2%) continue showing relative weakness while the technology sector trades in-line with the S&P 500. Given its current level, the S&P 500 is on track to extend this week's loss to 1.1%. 10:55 am: [BRIEFING.COM] Equity indices have ticked up off their lows, but they continue holding the bulk of their losses. The S&P 500 trades lower by 0.9% while the Nasdaq Composite (-0.6%) trades a bit ahead. The outperformance in the Nasdaq results from solid gains in the biotechnology space. To that point, the iShares Nasdaq Biotechnology ETF (IBB 311.85, +6.89) is higher by 2.2%, erasing this week's loss. On a related note, the health care sector (+0.5%) hovers in the green, while the utilities space (-0.1%) has dipped into the red after showing relative strength at the start. Elsewhere, the financial sector (-2.5%) continues trading behind its peers. 10:35 am: [BRIEFING.COM] - The dollar index trended near the flat line overnight and in early trade ahead of the morning's US employment data
- Upon release of underwhelming data, the dollar fell sharply lower and is now moderately negative on the session at -1% to 95.42
- Non-farm payrolls were 142K (vs. 205K est.), Private Payrolls were 118K (vs. 200K est.) and hourly earnings M/M were flat
- The lower-than-expected data (across the board) crushed the dollar as the market pushed back its consensus expectation for the Fed's first rate hike.
- The index's sharp drop immediately gave positive momentum to precious metals, with both gold and silver seeing a ssteep spike on the dollar's sell-off
- December gold is now +2.4% to $1140.40/oz and silver is +4% to $15.09/oz
- WTI traded positive overnight and into the early trading session, as headlines indicating a rise in geopolitical tensions in Syria, peripherally contributed to bullish sentiment
- Crude reversed that trend after the US data release however, moderately selling off despite a weakness in the dollar index.
- November WTI is now strongly down from overnight highs (near the $45.69/barrel level) to -1.2% to $44.22/barrel
- Natural gas is now positive at +0.2% to $2.44/MMBtu, bouncing from lows made yesterday (driven by the release of an inventory report which showed a large storage build)
- Copper is trending in the red at -1.1% to $2.28/lb, as early morning losses have most recently been worsened by the release of weak US factor order data
10:00 am: [BRIEFING.COM] The S&P 500 remains lower by 1.3%. According to the just-released Factory Orders report for August, orders decreased 1.7% while the Briefing.com consensus expected a decrease of 1.0%. 9:40 am: [BRIEFING.COM] As expected, the major averages began the trading day on the defensive in response to a disappointing September Nonfarm Payrolls report (142,000; Briefing.com consensus 205,000). The S&P 500 trades lower by 1.3% with nine sectors showing early losses. The financial sector (-2.5%) is the clear laggard in the early going as investors push back their rate-hike expectations. Meanwhile, six other sector show losses of 1.0% or more while the utilities space (+0.4%) outperforms, benefitting from lower yields. To that point, the 10-yr note sits on its high with the benchmark yield down 12 basis points at 1.92%. The Factory Orders report for August will be released at 10:00 ET (expected -1.0%). 9:11 am: [BRIEFING.COM] S&P futures vs fair value: -25.10. Nasdaq futures vs fair value: -56.10. The stock market is on track for a lower open as futures on the S&P 500 trade 25 points below fair value. Index futures climbed overnight, showing modest gains earlier this morning, but the overnight move is now history considering futures fell to lows after the release of a Nonfarm Payrolls report for September. According to the report, only 142,000 jobs were added while the Briefing.com consensus expected a reading of 205,000. Making matters worse, the prior month's reading was revised down to 136,000 from 173,000. Furthermore, the report showed no growth in hourly earnings while the consensus expected an increase of 0.2%. The retreat in equity futures has occurred alongside a surge in Treasuries that has sent the 10-yr yield lower by 11 basis points to 1.93%. Given the disappointing data and the lack of wage growth, market expectations for the first rate hike are all but sure to shift into next year. One more data point remains with the August Factory Orders report set to cross the wires (expected -1.0%) at 10:00 ET. 8:48 am: [BRIEFING.COM] S&P futures vs fair value: -20.90. Nasdaq futures vs fair value: -43.20. The S&P 500 futures trade 21 points below fair value. It was a somewhat mixed showing from markets in the Asia-Pacific region on Friday. That came after a tepid performance on Wall Street on Thursday and ahead of the U.S. employment report for September, which will carry monetary policy implications. Hong Kong's Hang Seng (+3.2%) was the clear winner as it played catch up following its closure on Thursday. China remained closed for holiday; Japan's Nikkei was flat; and Australia's S&P/ASX 200 declined 1.2%. - In economic data:
- Japan's August Household Spending +2.5% month-over-month (expected 0.5%; prior 0.6%); +2.9% year-over-year (consensus 0.4%; last -0.2%). Separately, Monetary Base +35.1% year-over-year (consensus 34.2%; last 33.3%) and August Unemployment Rate 3.4% (expected 3.3%; last 3.3%)
- South Korea's September CPI -0.2% month-over-month (expected 0.2%; prior 0.2%); +0.6% year-over-year (consensus 0.9%; last 0.7%)
- Hong Kong's August Retail Sales -5.4% year-over-year (expected -4.1%; prior -2.8%)
- Australia's August Retail Sales +0.4% month-over-month, as expected (last -0.1%) and August HIA New Home Sales +2.3% month-over-month (prior -0.4%)
- New Zealand's ANZ Commodity Price Index +5.5% month-over-month (prior -5.2%)
------ - Japan's Nikkei eked out a 0.02% gain, aided by some late buying interest. Strength in the materials (+1.4%) and consumer staples (+1.1%) sectors was offset by weakness in the health care (-1.4%) and financials (-0.4%) sectors. The top-performing stocks were Nitto Denko Corp (+5.7%), Sumitomo Osaka Cement Co (+5.0%), and Mitsubishi Motors (+4.5%) while Maruha Nichoro Corp (-4.0%), Hitachi Zosen (-3.8%), and Fukuoka Financial Group (-3.3%) brought up the rear. Out of the 225 index members, 100 ended higher, 108 finished lower, and 7 were unchanged. For the week, the Nikkei declined 0.9%.
- Hong Kong's Hang Seng surged 3.2% in a catch-up trade after being closed for a holiday on Thursday. Gains were led by Galaxy Entertainment Group (+10.2%), China Resources Land (+8.7%), and China Overseas Land & Investment (+6.8%). Out of the 50 index members, only three -- Li & Fung (-1.5%), Sun Hung Kai Properties (-0.4%), and Power Assets Holdings (-0.1%) -- ended the day lower. For the week, the Hang Seng increased 1.5%.
- China's Shanghai Composite: closed for holiday (National Day)
Major European indices have tumbled from their highs after the release of a disappointing U.S. Nonfarm Payrolls report. - Economic data was limited:
- Eurozone August PPI -0.8% month-over-month (expected -0.6%; prior -0.1%); -2.6% year-over-year (consensus -2.4%; last -2.1%)
- UK's September Construction PMI 59.9 (expected 57.5; last 57.3)
- Spain's Unemployment Change 26,100 (expected 17,900; prior 21,700)
------ - UK's FTSE remains higher by 0.4% with about half of its components in the green. Financials lead with Lloyds Banking Group, Prudential, and Standard Chartered up between 2.0% and 4.0%. Homebuilders lag with Barratt Developments, Persimmon, and Travis Perkins down between 0.2% and 1.0%.
- Germany's DAX is now down 0.2% after showing a 1.5% gain earlier. Exporters BMW, Daimler, and Volkswagen underperform with losses between 1.4% and 5.1%. On the upside, utilities hold gains with E.On and RWE both up near 5.5%.
- In France, the CAC hovers just above its flat line. Growth-sensitive names lead with ArcelorMittal, Total, and Bouygues up between 1.5% and 3.1%. On the flip side, Peugeot is the weakest performer, trading lower by 2.6%.
8:30 am: [BRIEFING.COM] S&P futures vs fair value: -10.10. Nasdaq futures vs fair value: -14.90. The S&P 500 futures trade ten points below fair value. September nonfarm payrolls came in at 142,000 while the Briefing.com consensus expected a reading of 205,000. The prior month's reading was revised down to 136,000 from 173,000. Nonfarm private payrolls added 118,000 against the 200,000 expected by the consensus. The unemployment rate held at 5.1%, which is what the Briefing.com consensus expected. Hourly earnings were unchanged, while the consensus expected an uptick of 0.2%. The average workweek was reported at 34.5, while the consensus expected a reading of 34.6. 7:56 am: [BRIEFING.COM] S&P futures vs fair value: +10.30. Nasdaq futures vs fair value: +29.80. U.S. equity futures trade near their pre-market highs amid upbeat action overseas with S&P 500 futures hovering ten points above fair value. However, some volatility is expected to surround the 8:30 ET release of the Nonfarm Payrolls report for September (Briefing.com consensus 205,000). In addition to Nonfarm Payrolls, investors will receive the August Factory Orders report at 10:00 ET (expected -1.0%). Treasuries hold modest losses with the 10-yr yield higher by two basis points at 2.06%. In U.S. corporate news of note: - Micron (MU 15.75, +0.98): +6.6% after better than expected results overshadowed below-consensus guidance.
- Progress Software (PRGS 22.18, -3.45): -13.5% after light revenue and below-consensus guidance overshadowed a two-cent beat and news of a fresh $100 million buyback.
- Wynn Resorts (WYNN 55.40, +3.69): +7.1% amid reports Macau casinos may receive support from China's government.
Reviewing overnight developments: - Asian markets ended mixed. Hong Kong's Hang Seng +3.2%, Japan's Nikkei settled flat, and China's Shanghai Composite remained closed.
- In economic data:
- Japan's August Household Spending +2.5% month-over-month (expected 0.5%; prior 0.6%); +2.9% year-over-year (consensus 0.4%; last -0.2%). Separately, Monetary Base +35.1% year-over-year (consensus 34.2%; last 33.3%) and August Unemployment Rate 3.4% (expected 3.3%; last 3.3%)
- South Korea's September CPI -0.2% month-over-month (expected 0.2%; prior 0.2%); +0.6% year-over-year (consensus 0.9%; last 0.7%)
- Hong Kong's August Retail Sales -5.4% year-over-year (expected -4.1%; prior -2.8%)
- Australia's August Retail Sales +0.4% month-over-month, as expected (last -0.1%) and August HIA New Home Sales +2.3% month-over-month (prior -0.4%)
- New Zealand's ANZ Commodity Price Index +5.5% month-over-month (prior -5.2%)
- In news:
- ANZ economists expect China's Q3 GDP to come in at 6.4% while 2015 GDP is expected to hit 6.8%
- Major European indices trade higher across the board. France's CAC +1.8%, UK's FTSE +1.5%, and Germany's DAX +1.4%. Elsewhere, Italy's MIB +1.7% and Spain's IBEX +1.0%
- Economic data was limited:
- Eurozone August PPI -0.8% month-over-month (expected -0.6%; prior -0.1%); -2.6% year-over-year (consensus -2.4%; last -2.1%)
- UK's September Construction PMI 59.9 (expected 57.5; last 57.3)
- Spain's Unemployment Change 26,100 (expected 17,900; prior 21,700)
- Among news of note:
- UK's construction PMI accelerated to levels last seen in March, giving a slight boost to the pound, which trades higher by about 20 pips against the dollar (1.5154)
5:48 am: [BRIEFING.COM] S&P futures vs fair value: +8.50. Nasdaq futures vs fair value: +26.30. 5:48 am: [BRIEFING.COM] Nikkei...17725.13...+2.70...+0.00%. Hang Seng...21506.09...+659.80...+3.20%. 5:48 am: [BRIEFING.COM] FTSE...6151.60...+79.10...+1.30%. DAX...9623.08...+113.80...+1.20%.
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