U.S Stock Futures Are Lower Ahead of July Jobs Report

sssU.S. stock futures are lower for Friday but have bounced off their lows ahead of the release of Friday morning’s U.S. employment report for July.

Yesterday U.S. stock markets faced selling pressure, the Dow Jones saw its largest decline since February, and the CBOE Volatility Index climbed 27 percent, the highest level since April, following a combination of economic factors ranging from a hawkish reading on the Fed’s latest FOMC statement in the wake of the Fed’s July meeting combined with recent dissent from Philadelphia Federal Reserve President Charles Plosser over the ending of monetary stimulus from the central bank.

Recent economic data outperformed Wall Street consensus estimates with latest  2nd quarter GDP results showing 4 percent annualized growth, fueling more speculation that the Federal Reserve will be faced with more pressure to raise short term interest rates in early to mid 2015 due to rising GDP, an improving job market, and improving inflation numbers.

Some other macro concerns that accelerated the selloff on Thursday included ongoing volatility in eastern Ukraine followed by recent economic sanctions on Russia by the U.S. and EU, Argentina’s second default in roughly 12 years, and  Portugal’s Banco Espirito Santo reporting that it needs more capital.

-Johnathan Schweitzer

 

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