U.S. Equities Begin On Softer Note; U.S. Jobs Data Negative

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A day after posting solid gains, U.S. equities are falling during the early market hours today. S&P 500 Index (INDEXCBOE:SPX) Futures fell sharply after meager job gains of only 38,000 were announced. Nasdaq (INDEXNASDAQ:NDX) Futures are similarly down about 0.5%

German growth estimate lowered

As far as global stock markets are concerned, momentum has been positive throughout the session. Asian equities finished higher, inspired by overnight U.S. stock gains and surging oil. European markets too remained buoyant event as traders await U.K. services purchasing managers’ index reading. Any downbeat services PMI reading could dampen market outlook, reigniting concerns that U.K. economy is contracting in second quarter.

The Eurozone outlook already hit a setback earlier today after Germany’s Bundesbank slashed the growth forecast for Germany. The Central Bank held low price inflation of services and industrial goods and weakness in oil prices responsible for lowered projection. It has now trimmed inflation projection for 2016 to 0.2% from 1.1% while cutting growth outlook for Germany to 1.7% from 1.8%.

Oil and gold hold gains

On the commodities front, both iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) and SPDR Gold Trust (ETF) (NYSEARCA:GLD) held gains, with gold jumping over 2% on the jobs report. Brent Crude, the global benchmark, traded steadily near $50 a barrel mark even as OPEC members were split over production ceiling decision. Yesterday’s OPEC meeting concluded without any major decision being announced, which came as a no surprise to market. Meanwhile, softer US Dollar (CURRENCY:USD) allowed gold to retain its positive momentum. The momentum was strengthened on the negative jobs report this morning.

The U.S. Department of Labor updated that a total number of individuals filing for jobless claims has dropped by 1,000 to 267,000 during the previous week. The data comes in sharp contrast to analysts’ expectations, who had projected an addition of 2,000 to 270,000 during the previous week. This report was preceded by ADP private employment report, which disclosed that employment in the U.S. inched up by 173,000 versus expectations of 175,000 in May.

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