Stocks look set for a higher open as the U.S. economy added a healthy number of jobs in May, though the result narrowly missed estimates.
Nonfarm payrolls increased by 559,000 in May, while the unemployment rate declined to 5.8%. Economists had predicted a gain of 671,000 jobs in May, following a disappointing 266,000 rise in April.
Any result between 400,000 and 1 million is “just right,” writes Tom Essaye, founder of Sevens Report Research. “A solid number would provide some relief to concerns about a labor shortage, and we’d expect a broad relief rally in stocks.” To be sure, it was the less economically-sensitive stocks performing the best after the report, as seen by the outperformance by the technology-heavy Nasdaq.
Stocks fell on Thursday, led by technology names, after strong ADP private-sector hiring data and weekly jobless claims, and the Federal Reserve’s decision to start selling the corporate bonds it bought last year amid the pandemic.
Investors have become increasingly concerned that the strong bounceback from the pandemic is pressuring prices, something that could ultimately spark a faster-than-expected move to cool the economy by the Fed.
So-called meme stocks, which are promoted by retail traders in online social media forums, are likely to stay in the spotlight. AMC Entertainment (ticker: AMC) fell 5% in premarket trading, a day after news that the movie-theater chain raised $587.4 million selling more stock.
Hedge-fund billionaire William Ackman’s special purpose acquisition company (SPAC) and Vivendi are in talks that could see his Pershing Square Tontine Holdings buy a 10% stake in Universal Music Group, a subsidiary of the French media conglomerate. The potential deal would give Universal Music an enterprise value of €35 billion ($42.4 billion), Vivendi said in a statement on Friday.
Five Below (FIVE) stock rose 6% after reporting a profit of 88 cents a share, beating forecasts for 65 cents a share, on sales of $598 million, above expectations for $555 million.
Wells Fargo (WFC) stock gained 1% after getting upgraded to Buy from Neutral at Bank of America.
Freeport-McMoRan (FCX) stock dropped 0.3% after getting downgraded to Neutral from Outperform at Exane BNP Paribas.
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