Dow Futures Tumble 225 Points, Bond Yields Spike on Jobs Surprise

Wage growth is at a multi-year high, but today's jobs report is sparking heavy selling

Managing Editor
Feb 2, 2018 at 9:14 AM
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Stock futures are pointed dramatically lower this morning, with Dow Jones Industrial Average (DJI) futures trading nearly 226 points below fair value after today's nonfarm payrolls report. The U.S. added a stronger-than-forecast 200,000 jobs in January -- and the report appears to have cemented expectations for another rate hike sooner rather than later, with 10-year Treasury yields surging to a four-year high.

Adding to the bearish momentum are pre-market losses for a number of blue-chip earnings reporters, including Apple (AAPL), Exxon Mobil (XOM), Visa (V), and Chevron (CVX). Against this backdrop, the Dow is on track to trade below 26,000 for the first time since Jan. 22, and in danger of snapping its four-week winning streak.

Continue reading for more on today's market, including:

Stock Futures Chart Feb 2

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 1.1 million call contracts traded on Thursday, compared to 627,629 put contracts. The single-session equity put/call ratio stayed at 0.59, while the 21-day moving average remained at 0.55.
  2. Exxon Mobil Corporation (NYSE:XOM) is down 3% in electronic trading, after reporting fourth-quarter earnings below analysts' expectations. The oil major touched an annual high of $89.30 on Monday, but the shares are on track to trade below their formerly supportive 30-day moving average for the first time since mid-December.
  3. GoPro, Inc. (NASDAQ:GPRO) is down 6% ahead of the bell, after J.P. Morgan Securities responded to last night's earnings miss by downgrading the camera concern to "neutral." Cowen and Company also issued a price-target cut to $5 from $6. GoPro stock has already shed 27% in 2018.
  4. Visa Inc (NYSE:V) is down 1.4% ahead of the bell, despite posting fiscal quarterly earnings above estimates, as traders cast a wary eye on the company's newly hiked full-year operating expense forecast. However, the blue-chip stock has received no fewer than seven price-target hikes since yesterday, and could be gearing up for another bullish February performance.
  5. The University of Michigan's consumer sentiment survey and data on factory orders will hit the Street later today. San Francisco Fed President John Williams is also slated to speak. Merck (MRK), Phillips-66 (PSX), and Weatherford (WFT) will close out the week in earnings.

premarket stock movers feb 2

Selling Pressure Sweeps the Globe

Sinking tech stocks pressured Asian benchmarks today, with South Korea's Kospi suffering the most among its regional peers. Specifically, the blue-chip index plunged 1.7% amid heavy selling for Samsung Electronics and SK Hynix. Elsewhere, Japan's Nikkei fell 0.9%, as SoftBank retreated and financial shares tumbled after the Bank of Japan offered a special bond purchase to try and contain rising yields. Hong Kong's Hang Seng also closed lower -- shedding 0.1% -- and while China's Shanghai Composite added 0.5%, it logged its biggest weekly loss since December 2016.

European markets are lower at midday, as bank stocks sell off after Frankfurt-based Deutsche Bank posted a larger-than-forecast fourth-quarter loss -- and its third straight full-year loss. At last check, the German DAX is down 1.4% -- pacing for its worst week since November 2016 -- the French CAC 40 is off 1.1%, and London's FTSE 100 is flirting with a 0.4% drop.

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