Weekly reviews

US equities set for a flat opening

US stock index futures ended higher on Friday, as market participants digested upbeat economic reports and employment data in the United States.

The S&P 500 added nearly 0.7 percent by the end of trading, with financial components on top of advancers. The Dow Jones have also increased notably during Friday’s session, adding 180 points and posting its best performance of the year. The Nasdaq refreshed its record levels.

  • Dow Jones Industrial Average: +0.94 percent / 20,071.46 points

  • Standard & Poor’s 500: +0.73 percent / 2,297 points

  • Nasdaq Composite: +0.54 percent / 5,666.77 points

According to the US Bureau of Labor Statistics, the economy added 227,000 jobs in January, well above expectations for a 175,000 build. However, the unemployment rate came in at 4.8 percent, a tick above forecast. Average hourly earnings rose 2.5 percent in annual terms.

Investors paid close attention to employment figures, considering it’s the first report published under a Trump administration. Last Wednesday. the Federal Open Market Committee said that "job gains remained solid and the unemployment rate stayed near its recent low", justifying possible interest rate hikes in the foreseeable future. The US central bank left benchmark rates unchanged between 0.50 and 0.75 percent in its January monetary policy meeting.

Other economic reports on Friday included December factory orders, which grew 1.3 percent and ISM non-manufacturing PMI for January, which came in at 56.5, down from a previous 56.6.

Washington continued to set the tone in US equity markets, with Trump announcing new economic sanctions against Iran, targeting 13 people and 12 entities. This decision comes after Tehran confirmed it tested mid-range ballistic missiles on Sunday, breaking a resolution from the United Nations Security Council. President Trump said Iran is “playing with fire”.

Such escalation in tension between the US and Iran is seen as a positive sign for commodity prices, based on speculation that sanctions could hurt the Arabian country’s oil production. According to Baker Hughes’ weekly oil rig count, US drillers added 17 rigs in the week ended January 27, leaving the total count at 583.

In a light day for data, market players will be focusing on ECB President Mario Draghi speech at 14:00 GMT on Monday and german factory orders at 07:00 GMT.