Dow Set to Open Higher Following Encouraging Nonfarm Payrolls Report

LONDON -- Stock index futures at 8 a.m. EST indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may open 52 points higher this morning after closing up 0.53% yesterday, while the S&P 500 (SNPINDEX: ^GSPC  ) may open up by 0.4%. CNN's Fear & Greed Index has stabilized at 34, indicating fear, after closing at 32 yesterday.

European stock markets and U.S. stock market futures edged lower this morning until the U.S. nonfarm payrolls report was released, pleasing investors. The addition of 175,000 jobs in May beat analysts' expectations of 169,000. The unemployment rate ticked up 0.1% to 7.6%, but this is simply the result of more people entering the workforce, which is in fact a good sign. In short, the results indicated growth -- but not enough growth to trigger the much-dreaded tapering of quantitative easing by the Federal Reserve, which would mean a reduction in the flow of new money into the markets.

As of 8:40 a.m. EDT, the FTSE 100 is up by 0.41%, while Germany's DAX is up by 0.67% after the German central bank downgraded its growth forecasts for the German economy. However, there was some good news for Europe's largest economy when new data showed that German industrial output beat expectations to record the biggest increase for more than a year in April, rising by 1.8% from March.

Today's employment data is likely to dominate proceedings, and the corporate earnings calendar is almost empty. Company that are expected to report today include Navistar International and Sears Hometown and Outlet Stores. Other stocks that could be actively traded include Quiksilver, which was down by 10% in premarket trading after reporting a surprise loss after markets closed yesterday. Yum! Brands may be in demand when markets open: The firm's stock is 1.2% higher in premarket trading after UBS upgraded its stock. Gap is 2.9% higher in premarket trading after reporting a 7% increase in same-store sales during May, compared with May 2012.

Finally, let's not forget that the Dow's daily movements can add up to serious long-term gains. Indeed, Warren Buffett recently wrote, "The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions." If you, like Buffett, are convinced of the long-term power of the Dow, you should read "5 Stocks To Retire On." Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

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  • Report this Comment On June 07, 2013, at 10:57 AM, supahsheep wrote:

    "Encouraging" non farm payroll data? I hate to burst anyone's bubble, but umployment rose to 7.6% from 7.5%, doesn't sound very encouraging to me, especially given the number of people who have dropped from the labor force.

    Say it like it is, the DOW soared today because investors got just enough bad news for them to have faith that Bernanke is going to keep the stimulus and QE going.

  • Report this Comment On June 07, 2013, at 1:23 PM, DuffMinsters wrote:

    If the important data was factored into measuring how the NFP report is indicating "economic recovery" rather than HF Algos and Central Bank agendas to push "risk on" regardless of economic data, the quality component if the report would be emphasized. Lets look at where this steady "improvement" in the job market is taking place: Leisure and Hospitality added 43K; Retail Trade jobs rose by 28K; Education and health added another 26K; Temp jobs: the lowest of all paying jobs

    added another 26K. Manufacturing lost 8000 jobs and the birth-death model added 205K jobs to the unadjusted number.

    Also largely de-emphasized was the was the downward revision of the April report from 165K to 149K and the net March-April revised change of -12K. Very important was also that earnings remained flat vs. expectations of a 0.2% increase.In the meantime, as usual, the Central Market Planners and their TBTF and hedge fund accomplices hit the market with all sorts of futures, including a massive take down in Gold and Silver, as usual around NFP reports, regardless of the number. The truth is, there is really no meaningful analysis, only high frequency manipulation of headlines numbers, which at best are completely misleading.

    Ultimately, this game of manipulation (perceptual, data and "markets") will no longer be over to paper over the underlying fact that the US economy and the global economy is moving into recession and earnings and revenues will show this despite the continued deterioration in the actual quality and quantity of meaningful full time, permanent, benefit paying jobs, the only kind of jobs that can lead to organic sustainable long term economic growth in the consumer portion of the real economy.

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