LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.07% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open unchanged. The CNN Fear & Greed Index remains in ‘fear’ territory, and is set to open at 33 today, after closing at 28 yesterday.
European markets edged lower this morning, but were broadly unchanged, ahead of this afternoon’s US nonfarm payrolls report. In the eurozone, Germany reported a surprise fall in industrial production, which dropped by 1.7% in July, missing expectations for a drop of 0.5%. Meanwhile in the UK, industrial production remained flat in July, breaking a recent run of growth. At 7am ET, the FTSE 100 was down 0.11%, the DAX was down 0.12%, and the CAC 40 was down 0.05%.
The big focus for US investors today will be August’s nonfarm payrolls report, which is due at 8.30am ET. Consensus forecasts suggest that 173,000 new jobs were added to the US economy last month, up slightly from 162,000 in July. Analysts expect the unemployment rate to remain unchanged at 7.4%. Today’s jobs report will be even more closely watched than usual, as investors expect it may have a direct impact on the whether the Federal Reserve decides to begin tapering its bond-buying programme this month. The next meeting of the rate-setting Federal Open Markets Committee takes place on 17-18 September, and investors are expecting some market volatility ahead of this time, due to the potential impact of a taper, which would effectively reduce the amount of money flowing into financial markets.
The corporate earnings calendar is almost empty today, but Smithfield Foods is expected to release quarterly results before the opening bell, while Smith & Wesson may also be actively traded after releasing downbeat guidance for the current quarter after markets closed last night. Shares in the gunmaker were down by 5.2% in after-hours trading, despite the firm’s fiscal first-quarter results beating analysts’ expectations. J.C. Penney shares were up 0.5% in pre-market trading and may be actively traded today following a report in the New York Post suggesting that the retailer will stop selling Martha Stewart-branded home products in its stores, due to poor sales.
Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.“
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> Roland does not own shares in any of the companies mentioned in this article.