Investing.com -- Stock futures in New York tick lower as investors gear up for the release of the closely-watched U.S. jobs report for December. Economists are projecting that nonfarm payrolls were less than the prior month, although recent data has pointed to resilience in labor demand that could boost the Federal Reserve's bid to engineer a soft landing for the world's largest economy.
1. Nonfarm payrolls ahead
The American economy is expected to have added fewer jobs in December versus the prior month, but is still seen rising at a solid rate.
Economists estimate that U.S. nonfarm payrolls rose by 170,000 last month, down from 199,000 in November. Average hourly earnings are projected to have increased at a monthly pace of 0.3%, decelerating marginally from the previous reading of 0.4%. The unemployment rate, meanwhile, is anticipated to come in at 3.8%, up from 3.7%.
A string of data earlier this week has pointed to a resilient jobs picture. Hiring by private employers in December far outpaced expectations and job openings fell to an almost three-year low.
Even still, labor demand has begun to show some signs of steadily easing under the strain of an unprecedented policy tightening campaign by the Fed that has brought rates up to 22-year highs. But if the slowdown remains gradual, it bodes well for a so-called "soft landing" -- a scenario in which the Federal Reserve manages to defeat inflation without causing a collapse in the broader economy.
2. Futures inch lower
U.S. stock futures pointed into the red on Friday, with investors preparing for the release of the all-important jobs report.
By 05:07 ET (10:07 GMT), the Dow futures contract had dipped by 88 points or 0.2%, S&P futures had shed 11 points or 0.2%, and Nasdaq 100 futures had lost 47 points or 0.3%.
The benchmark S&P 500 retreated by 0.3% in Thursday's trading session and the tech-heavy Nasdaq Composite fell by 0.6%, as a downbeat opening to the new year continued on Wall Street. Out of the three major averages, only the 30-stock Dow Jones Industrial Average closed in positive territory, edging up by 0.03% thanks in part to a solid performance in financial stocks.
Denting sentiment has been ebbing hopes that the Fed will roll out interest rate cuts in early 2024. Despite releasing an outlook for rates that was more dovish than prior projections last month, Fed minutes published this week suggested that policymakers believe borrowing costs could remain elevated "for some time."
3. Gold on pace for weekly decline as dollar gains
Gold prices dipped in European trade on Friday after sinking below key levels this week, while the dollar surged.
The yellow metal was nursing some losses for the week following a rally near the end of 2023. But the gains faltered as investors looked to take profits and uncertainty grew over the Fed’s rate plans.
Spot gold slid 0.3% to $2,037.79 per troy ounce, while gold futures fell 0.3% to $2,044.25 a troy ounce by 05:09 ET. Both instruments were down between 0.8% to 1% this week.
Recent bets that rate cuts could begin by as soon as March 2024 have been scaled back, spurring on a rise in the dollar. The greenback is on track for an over 1% weekly gain -- its best since July 2023.
"The start of the year has poured a little cold water on that kind of optimism [over March rate reductions], and our team retains a view that the first cut will come in May," analysts at ING said in a note.
4. Crude on course for weekly increase
Oil prices moved higher on Friday, driven in part by concerns over potential supply disruptions caused by recent unrest in the Middle East.
By 05:09 ET, the U.S. crude futures traded 1.0% higher at $72.92 a barrel, while the Brent contract climbed 0.8% to $78.19 per barrel.
Both benchmarks are on course to end the first week of the year around 1% higher. Attacks by Yemen's Iran-backed Houthis on shipping vessels in the Red Sea have fueled worries over the flow of supplies through a crucial trade artery between Europe and Asia.
But gains have been limited by data showing a massive build in U.S. oil product inventories in the final week of 2023. The reading indicated that demand remained weak in the world’s largest oil consumer.
5. Apple supplier Foxconn warns of Q1 revenue drop
Foxconn, a major assembler of Apple's (NASDAQ:AAPL) flagship iPhone smartphone, warned that it anticipates a year-on-year decline in first quarter revenue, following weaker demand in the previous three-month period.
In a statement, the Taiwan-based group -- formally known as Hon Hai Precision Industry Co Ltd -- said that the top-line figure for the first quarter faced a tough comparison with the initial three months of the prior year, when revenue was boosted by the post-COVID resumption of normal factory activity. The company did not provide specific numerical guidance.
The announcement comes after sluggish customer demand led to "flattish" annual fourth-quarter revenue at Foxconn's smart consumer electronics division, which includes handsets.
Fears over demand for iPhones have led to two analysts downgrades of Apple's stock this week, hitting the tech giant's shares. However, Apple remains the world's most valuable company by market value.