Daily Stocks Review: Risk Appetite in Play after Upbeat NFP – Apr 4, 2016

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The US March non-farm payrolls report turned out stronger than expected, as the economy added 215K jobs during the month versus the projected 206K gain. The jobless rate rose from 4.9% to 5.0% but this was caused by a rise in labor force participation, indicating stronger confidence in the jobs market. Still, some investors took this as a sign that borrowing costs might rise in the near-term, potentially weighing on business growth and investment.

Stock indices initially sold off upon seeing the numbers but eventually recovered to close in the green by the end of the session. The Dow 30 index was up 107.66 points to 17,792.75 (+0.61%), the S&P 500 index was up 13.04 points to 2,072.78 (+0.63%) and the Nasdaq ended 44.70 points higher to 4,914.54 (+0.92%).

Futures are also in the green so far, confirming that risk appetite is present. Dow 30 index futures for June delivery are up 13 points (+0.07%), S&P 500 futures are up 1.50 points (+0.07%) and Nasdaq futures are up 2.62 points (+0.06%).

European stocks turn lower

In Europe, equities were in the red as downbeat data weighed on gains. The German DAX closed 170.87 points down to 9,794.64 (-1.71%), the French CAC 40 was down 62.82 points to 4,322.24 (-1.43%), and the Euro Stoxx was down 53.19 points to 2,951.74 (-1.77%). DAX futures for June delivery are down 131 points (-1.31%), French CAC 40 futures are down 55.5 points (-1.27%) and Euro Stoxx futures are down 44 points (-1.50%).

Data from the United Kingdom was weaker than expected again, as the manufacturing PMI slid rose from 50.8 to 51.0, short of the consensus at 51.4. The London FTSE was down 28.85 points to 6,146.05 (-0.47%) and futures are down 5.3 points (-0.08%).

Asian equities and futures looking strong

The week and new quarter seems to be off to a good start, as most Asian equities and futures are currently in the green. The S&P ASX 200 is up 32.52 points to 5,031.90 (+0.65%) and futures are up 21.5 points (+0.43%). Stock markets in China are also in the green but Japan’s Nikkei 225 is down 40.69 points to 16,123.47 (-0.25%) and futures are down 70 points (-0.40%).

Earlier today, Australia reported mixed data, as building approvals jumped 3.1% while retail sales remained flat. Major event risks for this week include the RBA interest rate decision and the release of the FOMC meeting minutes.

 

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.