By Riva Gold
U.S. stock futures edged higher after employment data signaled solid momentum in the labor market.
Nonfarm payrolls rose by a seasonally adjusted 161,000 in October from the prior month, the Labor Department said Friday. Wage growth accelerated to its strongest pace since the recession.
The unemployment rate, derived from a separate survey of American households, ticked down to 4.9% last month from 5% in September.
U.S. government bond yields rose as the jobs report pointed to an uptick in wage inflation, bolstering the Federal Reserve's case to raise interest rates in December for the first time in a year.
S&P 500 futures swung to slight gains following the report, up 0.2% compared with ticking down less than 0.1% ahead of the data.
Changes in stock futures don't always accurately predict moves in the stock market after the opening bell. But if stocks can hold slight gains, it would snap an eight-session losing streak for the S&P 500, its longest stretch of declines since the financial crisis.
The yield on the benchmark 10-year Treasury note was 1.815%, compared with 1.805% right before the jobs data.
The Stoxx Europe 600 slipped 0.7%, 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 the U.S. election.
"The only certainty in the near term of a [Donald] 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 3.4%.
Despite major economic reports, third-quarter earnings and 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. U.S.-traded crude edged down 0.8% to $44.32 a barrel on Friday, adding to a five-day losing streak. It is down this week on growing doubts that members of the Organization of the Petroleum Exporting Countries will reach a solid deal to cut production.
"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 firstname.lastname@example.org
(END) Dow Jones Newswires
November 04, 2016 09:16 ET (13:16 GMT)
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