By Riva Gold
Stocks fell Friday ahead of the U.S. jobs report, with Wall Street narrowly poised to extend its longest stretch of declines since the financial crisis.
Futures pointed to a 0.1% opening loss for the S&P 500, on track for its first nine-session slide since 1980. The Stoxx Europe 600 was down 0.9% midday with every sector in the red, while Japan's Nikkei Stock Average fell 1.3% as the market reopened from a holiday to a stronger yen.
Investors globally have been cutting down on assets perceived as risky in recent sessions while adding to positions in gold, the yen and the Swiss franc as polls have tightened between the two presidential candidates, in anticipation that a surprise outcome in the race could temporarily upend global markets.
"The only certainty in the near term of a Trump victory is a lot of uncertainty," said Valentijn van Nieuwenhuijzen, head of multiasset at NN Investment Partners, citing questions about U.S. trade, security and immigration policies. "We've been a bit less aggressive in risk-taking than we otherwise would've been," he said, using currency and fixed-income markets for protection.
The yen has risen 1.7% against the dollar this week, while the S&P has shed roughly the same amount to trade near a four-month low. European stocks are on track to lose 3.6%.
The yield on the 10-year U.S. Treasury note fell to 1.799% Friday from 1.811%, while the WSJ Dollar Index was little changed after five straight days of declines.
Despite major economic reports, third-quarter earnings and four major central bank meetings, the election has dominated global markets all week.
"We are entering a possible period of turbulence," said Alain Bokobza, head of global asset allocation at Société Générale. "Few portfolio managers are optimistic, and many are hedged against key risks."
Oil has come under pressure as well. Brent crude edged down 0.4% to $46.15 a barrel on Friday, adding to a five-day losing streak. It is down over 7% so far this week, amid growing doubts that members of the Organization of the Petroleum Exporting Countries will reach a solid deal to cut production.
Investors were also looking ahead to the nonfarm payrolls report, a key monthly gauge of the U.S. economy due later Friday. A strong report is expected to further cement investors' expectations for the Federal Reserve to raise interest rates in December for the first time in a year.
"Jobs growth has been pretty solid in the U.S. economy," said Niladri Mukherjee, managing director at Merrill Lynch Wealth Management.
"We think the Fed should be in a place to raise interest rates by 25 basis points at its December meeting--predicated on the fact that we don't get a shock between now and then," he said.
In currencies, the British pound continued to gain against the dollar after its best day since August, rising 0.2% to $1.2496. The Bank of England played down the chances of a further cut in interest rates on Thursday, while a U.K. court separately ruled that Prime Minister Theresa May can't start the process of separating the U.K. from the European Union without approval from Parliament.
Write to Riva Gold at email@example.com
(END) Dow Jones Newswires
November 04, 2016 08:33 ET (12:33 GMT)
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