Technology stocks were poised to continue their push higher on Friday, as Nasdaq futures outperformed the other major benchmarks, giving the tech sector a chance to turn higher for the week. Traders were also looking ahead to the top-tier U.S. monthly jobs report, due before the market open.
More broadly, sentiment was buoyed by an upbeat session in Europe, where stocks rallied after a major breakthrough in Brexit talks between London and Brussels put negotiators in position to advance to the next phase.
What are futures doing?
Futures for the Nasdaq-100 index NQZ7, +0.43% climbed 31.75 points, or 0.5%, to 6,373.50, setting the Nasdaq Composite Index COMP, +0.54% on track for a third straight session of gains.
The tech-heavy index on Thursday closed 0.5% higher, trimming its weekly loss to 0.5%. That means the benchmark could erase its weekly loss, if the optimism in the futures markets persists.
Futures for the Dow Jones Industrial Average YMZ7, +0.12% gained 47 points, or 0.2%, to 24,293, while those for the S&P 500 index ESZ7, +0.16% added 5.30 points, or 0.2%, to 2,647.75.
Both benchmarks logged gains of 0.3% on Thursday. As of yesterday’s close, the Dow average DJIA, +0.29% was on track for a 0.1% weekly loss and the S&P 500 SPX, +0.29% was set for a 0.2% slide for the week.
What’s driving the markets?
The rebound in tech stocks that started on Wednesday looked set to continue on Friday. Analysts noted that after the selloff earlier in the week, the sector doesn’t look that expensive, as long as earnings continue to grow. The tech sector is one of the fastest-growing industries in the U.S. and the Nasdaq is up 27% year-to-date, outpacing the S&P and Dow.
Earlier, the Nasdaq Composite lost 1.6% from Friday through Tuesday, on the back of profit-taking after a big rally and on concerns about how the U.S. tax overhaul will impact the tech sector.
Investors on Friday also welcomed news that both the Senate and House late Thursday approved a two-week funding bill, staving off a threatened government shutdown this weekend. The bill now moves to President Donald Trump to sign, which he is expected to do on Friday. The bill buys Trump and congressional leaders more time to hammer out a longer-term deal.
In Europe, investors cheered a breakthrough in Brexit talks between the U.K. and European Union. After days of tense negotiations, Jean-Claude Juncker, president of the European Commission, said early Friday that “sufficient progress” has been made for talks to move on to the second phase, which will cover trade agreements and a potential transition period.
European stocks rallied on the news, with the Stoxx Europe 600 index SXXP, +0.78% up 0.8% at 389.49. European markets were also propped up by a rally in bank stocks FX7, +2.63% , which came after a long-awaited agreement on banking rules by global finance officials highlighted that most lenders hold a sufficient amount of capital.
The pound GBPUSD, -0.3562% pound initially spiked to an intraday high of $1.3521, but has since slipped back to $1.3468.
What’s coming up in economics?
The headline data set is the nonfarm payrolls report out at 8:30 a.m. Eastern Time. Economists polled by MarketWatch expect 200,000 jobs were added to the U.S. economy last month and that the unemployment rate is still at a 17-year low of 4.1%. Average hourly earnings are forecast to have risen 0.3%, up from a flat reading in October.
The ICE Dollar Index DXY, +0.33% was up 0.3% at 94.024 ahead of the release.
A reading on consumer sentiment in December is scheduled for release at 10 a.m. Eastern, as is a report on wholesale inventories for October.
There were no Federal Reserve speakers slated to speak on Friday.
What are strategists saying?
“The big event today is of course the U.S. nonfarm payrolls. They’re expected to continue bouncing back, as more people laid off because of the hurricanes come back to work,” said Marshall Gittler, chief strategist at ACLS Global.
“The ‘whisper’ number on Bloomberg is significantly higher than economists’ forecasts at 221k. This suggests that if anything, investors are braced for a higher figure than the market consensus. This leads me to think that there may be more downside potential to the figure than upside, at least with regards to the NFP figure itself,” he added in his note.
Which stocks are in focus?
Shares of American Outdoor Brands Corp.AOBC, +4.85% tumbled 21% ahead of the bell after the gun maker late Thursday reported a drop in profit and forecast continued struggles amid “challenging market conditions.”
United Natural Foods Inc.UNFI, +0.25% could also move in Friday’s session. The food distributor late Thursday reported stronger-than-expected sales and raised its full-year forecasts.
Gilead Sciences Inc.GILD, -0.78% said late Thursday it will buy privately held cellular therapy company Cell Design Labs Inc. for $567 million. Gilead shares weren’t moving in Friday’s premarket session.
Also in focus was United Continental Holdings Inc.UAL, +2.15% . The airline operator said in Thursday’s extended session it would buy back an additional $3 billion in shares.
U.S.-listed stocks of European banks were among movers in Friday’s premarket session after agreement on banking rules. Shares of Deutsche Bank AG DB, +1.89% rose 1.9%, Royal Bank of Scotland Group PLC RBS, +0.94% were up 1.9% and Barclays PLC BCS, +1.38% gained 3.4%.
What are other markets doing?
Asian stocks closed firmly in positive territory, with Japan’s Nikkei 225 index NIK, +1.39% staging a 1.4% rally.
Crude oil prices CLF8, +1.32% rose 0.7% to $57.10 a barrel, while gold prices GCG8, -0.34% dropped 0.4% to $1,247.80 an ounce.
Bitcoin BTCUSD, -7.40% slipped back below $15,000, just hours after blasting through the $17,000 milestone.
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