Stocks in the US navigated between little gains and minor losses in the early hours of Friday. The key employment report is on the horizon and traders await any policy clue.

Incoming Data

The US Department of Labor will release the monthly jobs report on Friday. Bloomberg had a survey of Economists who expect the payroll gain to hit 260,000. Bloomberg compiled the Economists’ consensus.

Shares linked with the S&P 500 index dropped by 0.1%. But the Dow gained by the same figure and Nasdaq lost 0.4%.

The stock market closed Thursday’s session lower for the second day in a row. This was after the last two-day rally failed to extend. But the averages are still comfortably above the lows seen this year.

The averages, so far, are on track to end the week on the positive side. Investors are wagering that market calm might compel the Feds to become less aggressive. There have been increasing calls for the central bank to relax the interest rate increases.

The appeal to the Federal Reserve followed weaker economic reports and slower manufacturing activities. The UN also argued that continuous rate hikes will adversely affect developing economies. But strategists on Wall Street say it is premature to expect a policy pivot now.

Feds are Not Backing Down

JPMorgan analysts have said via recent reports that stocks would need a monthly NFP print. They put the minimum figure at 100,000 before the market changes the Feds’ expectations. Bank of America analysts said a pivot will come after a payroll sting.

The BofA team said the Federal Reserve’s job is far from being over. So, the market should expect increments to continue till there are almost negative payrolls.

Importantly, officials of the Reserve have said there are no plans to rescind the move. A number of them have made their position clear on the matter recently. 

The President of the Chicago Feds, Charles Evans, said there is further to go. He indicated that the benchmark rate might be between 4.5% to 4.75% by 2023 spring. Inflation is high and there is a need for restrictive settings, he said.

Crude oil shares climb this week after the heaviest oil cut from OPEC+ since 2020. Research from DataTrek showed crude from West Texas selling at over $85/barrel. The firm said oil prices are underappreciated for the Feds and the expectation of economic growth. 

AMD cut down its third-quarter income guidance and threw chipmakers into a frenzy, Friday. It also warned there might be an inventory correction in the PC supply.