MARKET SNAPSHOT: S&P 500 Set For Another Historic Run, With U.S. Jobs Data On Deck

By Sara Sjolin, MarketWatch Features Dow Jones Newswires

Wages are key part of U.S. jobs report, analysts say

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U.S. stocks were poised for another record-setting session on Friday, as Dow futures breezed further past the 25,000 milestone in a global stock rally that analysts said is showing no signs of tapering off soon.

Traders were focused on the closely watched nonfarm-payrolls report due later in the session, which will be watched for any clues as to whether U.S. wages are picking up.

What are stock futures doing?

Futures for the Dow Jones Industrial Average rose 83 points, or 0.3% to 25,136, while those for the S&P 500 index climbed 7.70 points, or 0.3%, to 2,731.50. Futures for the Nasdaq-100 index gained 23.75 points, or 0.4%, to 6,627.25.

All three benchmarks scored record closing highs on Thursday (http://www.marketwatch.com/story/dow-on-track-for-25000-milestone-as-global-stock-rally-stays-strong-2018-01-04), with the Dow average ending above the 25,000 handle for the first time ever after logging a 0.6% gain. The S&P 500 rose 0.4%, and the Nasdaq Composite Index closed 0.2% higher.

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The S&P 500 has now closed at a record on the first three trading days of the new year, the first time it has done so since 1964 (http://www.marketwatch.com/story/the-sp-500-is-poised-to-do-something-it-hasnt-done-since-1964-2018-01-04), according to WSJ Market Data Group.

For the week, the indexes were set for gains between 1.4% and 2.5% as of Thursday's close.

What's driving the market?

Analysts said the upbeat sentiment is buoyed by the recently passed corporate tax-cut package in the U.S., rising commodity prices and robust corporate earnings. Solid economic data and low bond yields have also been cited as contributing factors.

What data are ahead?

The top-tier monthly jobs report is out at 8:30 a.m. Eastern Time, and investors are particularly looking for a read on the strength of wages as a gauge of inflation.

The minutes from the December Federal Reserve meeting showed policy makers were relatively upbeat on the outlook for the U.S. economy, but still worried about the persistently low inflation levels.

That means the wage growth data out on Friday will likely take on more significance, as it could encourage a more hawkish stance at the Fed, analysts said.

Read:Lack of wage growth will likely dampen celebration of December jobs report (http://www.marketwatch.com/story/lack-of-wage-growth-will-likely-dampen-celebration-of-strong-december-jobs-report-2018-01-04)

Economists polled by MarketWatch forecast that wages grew 0.3% in December, up from 0.2% in November. Nonfarm payrolls are expected to have risen by 195,000, down slightly from the 228,000 seen in November. The unemployment rate is forecast to remain at 4.1%.

The dollar was higher ahead of the data (http://www.marketwatch.com/story/dollar-rebounds-as-traders-look-to-jobs-data-for-inflation-hints-2018-01-05), with the ICE dollar index up 0.2% at 92.051.

In other economic news on Friday, figures for the foreign trade deficit for November are due for release at 8:30 a.m. Eastern. The ISM nonmanufacturing report for December and an update on factory orders for November are scheduled for 10 a.m. Eastern.

Fed speakers

Philadelphia Fed President Patrick Harker is slated to give a speech on the economic outlook at the American Economic Association at 10:15 a.m. Eastern in Philadelphia.

Fed President Loretta Mester is expected to speak on a panel about "coordinating conventional and unconventional monetary policy for macroeconomic stability" at 12:30 p.m. in Cleveland.

What are strategist saying?

"Another strong bullish move on the Dow has taken the market clear into all-time high territory once more. The start to 2018 has been extremely positive, and the strength of the momentum suggests there is little reason not to back further gains," said Richard Perry, market analyst at Hantec Markets in a research note.

"Very little regard has been given to the key psychological 25,000 barrier, with the market breezing straight through yesterday. The bulls are now well-positioned moving into nonfarm payrolls," said Perry.

"Earnings are key at the moment as this global recovery/expansion has everything apart from wage growth/inflation which in turn is keeping the Fed rate hikes gradual and volatility low. [Deutsche Bank] has put out a fair amount of research over the last few weeks detailing how U.S. wage growth is picking up so it'll be interesting to see whether this can find its way into the main headline data soon," said Jim Reid, macro strategist at Deutsche Bank, in a note.

Which stocks are in focus?

Apple Inc.(AAPL) shares were marginally higher in Friday's premarket trade. The technology published information late Thursday that confirmed that all devices (http://www.marketwatch.com/story/apple-admits-its-devices-are-affected-by-meltdown-and-spectre-chip-bugs-2018-01-04) running its mobile and personal-computer operating systems are affected by two massive computer chip vulnerabilities (http://www.marketwatch.com/story/meltdown-and-spectre-are-huge-vulnerabilities-for-intel-and-more-what-you-need-to-know-2018-01-03).

Spirits and beer company Constellation Brands Inc.(STZ) is slated to report earnings ahead of the bell.

U.S.-listed shares of Fiat Chrysler Automobiles NV(FCA.MI) gained 2.4% premarket after J.P. Morgan lifted the car maker to overweight from neutral.

Shares of Cal-Maine Foods Inc.(CALM) dropped 4.6% ahead of the open after the company missed earnings estimates for its fiscal second quarter (http://www.marketwatch.com/story/cal-maine-shares-slide-almost-5-premarket-after-earnings-fall-short-of-estimates-2018-01-05).

AveXis Inc.(AVXS) fell 4.5% premarket. The gene-therapy company said late Thursday it was preparing to respond to Food and Drug Administration information requests about AveXis's primary gene therapy, which would be used to treat a form of spinal muscular atrophy.

What are other markets doing?

Asian stock markets continued to power higher (http://www.marketwatch.com/story/asian-markets-continue-soaring-to-new-highs-but-show-signs-of-cooling-2018-01-04), with Japan's Nikkei 225 index ending at a 26-year high.

It was a similar story in Europe (http://www.marketwatch.com/story/european-stocks-rise-for-3rd-day-as-global-rally-stays-strong-2018-01-05), where the Stoxx Europe 600 index rose 0.6%.

Crude-oil prices dropped 0.9% to $61.41 a barrel, while gold futures slipped 0.2% to $1,318.40 an ounce.

In cryptocurrencies, bitcoin futures jumped 7.2% to $15,970. Bitcoin itself rose 4.8% to $15,876.43 on Coindesk.com, while Ripple coins fell 12% to $3.26, according to CoinMarketcap.com. Ripple coins started to retreat after a series of records Thursday night after Coinbase said it isn't adding the currency to its exchange at this point.

(END) Dow Jones Newswires

January 05, 2018 07:57 ET (12:57 GMT)