S&P 500 Extends Winning Streak After April Jobs Beat Forecasts

Also, 30-year T-bond, gold, crude oil and euro futures

1. S&P 500 E-mini futures (/ES): +1.14% 
2. 30-year T-bond futures (/ZN): -0.59% 
3. Gold futures (/GC): +1.37% 
4. Crude oil futures (/CL): -0.34% 
5. Euro futures (/6E): +0.54% 

A sigh of relief was heard across Wall Street this morning when the April U.S. jobs report came in stronger than expected. The nonfarm payrolls report for last month showed the economy added 177,000 jobs, well-above the forecast of 130,000. The unemployment rate (U3) stayed on hold at 4.2%, while the labor force participation rate ticked higher to 62.6% from 62.5%. Wages likewise moderated to a gain of 3.8% year-over-year (y/y) from a gain of 3.9%. All-in-all, evidence of any tariff impact is thus far limited; then again, the dataset’s reference period (April 6-12) is from before any significant tariff impact would be felt.  

An above-estimates jobs report and progress on the trade war front boosted market sentiment this morning, sending S&P 500 contracts (/ESM5) up over 1% in early trading. The move higher comes despite a disappointing set of earnings results that crossed the wires before the bell. Block (XYZ) fell over 20% after posting a miss on revenue. Chevron (CVX) fell over 1% after pulling back its share repurchase program. Altassian (TEAM) fell 8% after it missed estimates and provided weak guidance. Take-Two Interactive (TTWO) traded 7% lower after the game maker pushed back the release date for Grand Theft Auto 6.  

Bond prices fell, with Treasuries declining across the curve this morning following the jobs report. 30-year T-bond futures (/ZBM5) fell 0.59% as traders pulled back rate cut bet odds. The market now expects between three and four cuts this year after removing the chances for a rate cut in June. Despite the upside in yields, the dollar fell against its major peers. The Treasury market has several potentially high-impact bond auctions on the schedule for next week, including 10-year and 30-year auctions.  

Gold prices (/GCM5) were up over 1% early today but the metal remains on track for its first back-to-back weekly loss. The losses indicate uncertainty about policy has hit a peak, which has incentivized some profit-taking in the metal after it hit all-time highs in April. Still, prices are holding above the early April swing high near the 3,200 level, keeping the technical posture intact for now.  

Crude oil (/CLM5) prices fell this morning after some moderation in overnight trading broke down. Prices are now trading near the 58 level, which aligns with swing lows traded in early April. The recent positive news on trade talks and the U.S. jobs report wasn’t enough to ward off more selling as we move into the weekend. Traders are positioning themselves for an OPEC+ meeting on Monday May 5, when the group is expected to move forward with plans to release more output onto the market for a second month in a row. The U.S. has also returned to its maximum pressure campaign on Iran after talks over its nuclear program were pushed back again. For now, oil traders seem to be focused on the possibility of a global recession that would come amid a higher-supplied market via OPEC countries.  

The Euro trimmed some of its gains after this morning’s U.S. jobs report, but Euro contracts (/6EM5) remained higher into the American trading hours. European inflation data remained stubborn based on the most recent Eurozone Harmonized Index of Consumer Prices (HICP), but European policymakers look ready to move forward with cutting rates and offering more support to the economy in the face of tariffs. Meanwhile, U.S. rate cut bets have been pushed back. Traders remain keen on Euro buying for now, and prices are holding above the 21-day exponential moving average (EMA).  

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
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