U.S. stock-index futures pointed to a lower open on Friday, extending the recent weakness that has been seen in the equity market as the April jobs report came in below expectations.
Trade talks between the U.S. and China were also drawing attention, as the second day of discussions took place. The U.S. has reportedly handed Beijing’s team a lengthy list of demands aimed at cutting the trade imbalance between the two.
What did the main benchmarks do?
Dow Jones Industrial Average futures YMM8, -0.41% were down 103 points, or 0.4%, to 23,806, while S&P 500 futures ESM8, -0.37% ESM8, -0.37% slipped 10.30 points, or 0.4%, to 2,621.25. Nasdaq-100 futures NQM8, -0.48% fell 31.50 points, or 0.5%, to 6,633.
On Thursday, the Dow Jones Industrial Average DJIA, +0.02% recovered from a decline of as many as 394 points and closed up less than 0.1%, to 23,930.15, ending a four-session slide. The S&P 500 index SPX, -0.23% dropped 0.2% to 2,629.75, and the Nasdaq Composite Index COMP, -0.18% closed 0.2% lower at 7,088.15.
For the week, the Dow industrials were set for a 1.6% slide as of Thursday’s close, while the S&P 500 was looking at a 1.5% fall and the Nasdaq at a 0.4% decline.
What’s driving markets?
The U.S. created 164,000 new jobs in April, below the 188,000 that had been expected. Separately, the unemployment rate fell to 3.9% from 4.1%, the first time the jobless rate has dropped below 4% since the end of 2000.
In Beijing, U.S. and Chinese officials were meeting for discussions on tariffs and other trade issues. Worries about trade hostilities between the top two global economies have roiled financial markets in recent months.
The U.S. has handed China a lengthy list of demands, The Wall Street Journal reported, including a demand to reduce the bilateral trade deficit by at least $200 billion by the end of 2020. The deficit stood at $375 billion last year.
Several Federal Reserve officials are scheduled to speak on Friday. New York Fed President William Dudley kicks off the speeches at 12:45 p.m. Eastern at Bloomberg headquarters in New York, covering “financial tumult of our times and challenges ahead.”
San Francisco Fed President John Williams is set to appear at a monetary policy conference at the Stanford University’s Hoover Institution at 3 p.m. Eastern. At the same conference, Fed Vice Chair for Supervision Randal Quarles steps up at 5:30 p.m. Eastern to talk about liquidity regulation and the Fed’s balance sheet.
Dallas Fed President Rob Kaplan, Atlanta Fed President Raphael Bostic and Kansas City Fed President Esther George are all slated to take part in a panel discussion at the conference at 8 p.m. Eastern.
What are strategists saying?
“We’re at or near full employment, so the jobs report shouldn’t be a big market mover, compared with issues like wages or trade. If we get through May and June and see that the trade talk was most rhetoric and posturing, that headwind will turn into a tailwind. Conversely, if this spitting match that is going back and forth leads to tariffs being enacted, then the headwind will become stronger,” said Hank Smith, chief investment officer at Haverford Trust Co.
Which stocks are in focus?
Newell Brands Inc. NWL, -0.60% rose 4.9% ahead of the opening bell after first-quarter earnings beat forecasts. The consumer goods company also announced an agreement to sell packaging maker The Waddington Group for about $2.3 billion.
Celgene Corp. CELG, -1.73% added 2.3%. The biotech company posted first-quarter earnings ahead of forecast and provided a 2018 outlook above analysts’ expectations.
VF Corp. shares VFC, -1.52% may be in focus after the lifestyle and apparel retailer produced reported an adjusted profit that was better than expected and revenue growth of about 22% to $3.05 billion. Shares weren’t actively traded.
After the close, Berkshire Hathaway Inc. BRK.A, -1.17% BRK.B, -0.88% is scheduled to release its quarterly earnings report. Chief Executive and Chairman Warren Buffett hosts Berkshire’s annual meeting on Saturday.
Apple Inc. AAPL, +0.18% was up 1.1% after CNBC reported Berkshire Hathaway bought 75 million shares of the iPhone maker in the first quarter.
GoPro Inc. GPRO, -0.20% inched 0.8% higher before the open, after the technology company late Thursday posted earnings that beat expectations.