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U.S. STOCK FUTURES CHURN, YIELDS FALL, AFTER LATEST JOBS DATA

The main U.S. equity index futures are mixed and little changed after the release of the latest data on U.S. employment. E-mini S&P 500 futures EScv1 are now roughly unchanged on the day and flat with where they were just before the data came out.

The February nonfarm payroll headline jobs number came out at 151k vs the Reuters Poll calling for 160k. The prior headline jobs read for January was revised down to 125k from 143k.

The February unemployment rate was 4.1% vs a 4.0% estimate.

Wage data, on a month-over-month basis was in-line with the estimate, and cooler-than-expected on a year-over-year basis:

According to the CME's FedWatch Tool, the probability that the Fed sits on its hands and leaves its current target rate of 4.25%-4.50% unchanged at its March 18-19 FOMC meeting is now around 95% vs 91% just before the data was released. The chance that the FOMC cuts rates by 25 basis points is now around 5% vs 9%.

Looking out further into 2025, the market is showing a bias for the Fed's next 25 basis point cut to occur in June. After that, rates are then expected to decline in July and then again in October for a total of around 75 bps of cuts this year.

The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.22%. It was around 4.25% just before the numbers came out. The yield ended Thursday at 4.282%.

A majority of S&P 500 index .SPX sector SPDR ETFs are quoted higher in premarket trade. Materials XLB.P, up around 0.9%, is posting the biggest gain. Communication services XLC.P, off only about 0.3%, is taking the biggest hit.

The SPDR S&P regional banking ETF KRE.P is up around 0.4%.

Regarding the jobs data, Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said:

"Not to be a Debbie Downer, but there was a shockingly large jump in the number of people working part time because of economic reasons and a large increase in the number of multiple jobholders."

Jacobsen added "While federal employment fell 10,000, the survey was done prior to the large layoffs, so we are likely to see government serving as a drag on payroll growth."

"The market is back to pricing in three rate cuts in 2025, but I wouldn’t bank on the Fed sending any dovish signals anytime soon. With the unemployment rate at 4.1% and inflation still above target, they have no reason to change their messaging yet."

Here is a premarket snapshot from around 08:52 EST:

(Terence Gabriel, Chuck Mikolajczak)

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