Futures inch higher on trade optimism, jobs data awaited

[April 05, 2019]   By Sruthi Shankar

(Reuters) - U.S. stocks index futures edged higher Friday on hopes that Beijing and Washington were making headway to resolve their trade dispute, but gains were kept in check as investors waited for March payrolls data.

President Donald Trump said on Thursday the countries were close to a trade deal that could be announced within four weeks, potentially easing concerns about a months-long tariff war clouding global growth.

However, trading was subdued as markets awaited the monthly employment report, which is expected to show job growth rebounded from a 17-month low in March, increasing by 180,000 last month following February's 20,000 job count.

The Labor Department report, due at 8:30 a.m. ET, will also likely show average hourly earnings rose 0.3% in March after a 0.4% rise in the previous month, with the unemployment rate seen steady at 3.8%.

The data follows on the heels of fairly upbeat construction spending and factory numbers, although many are worried that fading stimulus from a $1.5 trillion tax cut package, trade disputes and slowing global growth are casting a shadow over the economy.

"The mix of data releases is likely to show that the U.S. economy is neither too cool nor too hot, leaving the Fed on hold though not necessarily as long as the market expects," analysts at Nordea Asset Management wrote in a note.

The Federal Reserve last month suspended its three-year campaign to tighten monetary policy, increasing market expectations of an interest rate cut.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 4, 2019. REUTERS/Brendan McDermid/File Photo

Economists say a strong employment report in March would suggest those expectations were premature. The rate cut expectations had gained traction when the U.S. Treasury yield curve briefly inverted in late March, reviving recession fears.

However, trade hopes and a dovish Fed have helped push the S&P 500 to its highest since Oct. 9, putting the index less than 2% away from an all-time high of 2,940.91 points.

Bank of America Merrill Lynch said the index would scale new highs above 3,000 in the second quarter, fueled by gains in bank and oil stocks, before peaking out.

At 7:09 a.m. ET, Dow e-minis were up 30 points, or 0.11%. S&P 500 e-minis were up 4 points, or 0.14% and Nasdaq 100 e-minis were up 14.25 points, or 0.19%.

Among stocks, Intel Corp slipped 1.1% after Wells Fargo downgraded the chipmaker's stock to "market perform" from "outperform".

Bed Bath & Beyond Inc climbed 2.3% after Morgan Stanley upgraded the company's shares to "equal-weight" from "underweight," saying that the emergence of activist investors will create upside for the stock in the near term.

(Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)

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