#PreMarket Primer: Friday, June 6: Payrolls Data May Not Live Up To April's Performance

US non-farm payrolls data is expected to show a decline in job creation from April to May.

However, May’s figures are still expected to be solid with 210,000 new jobs to have been created. April’s increase of 288,000 was the US’ strongest increase in over two years, but the data was attributed to delayed hiring due to the unusually cold winter.

In May, the pent-up demand for labor is expected to wane leaving a more realistic picture of actual job growth for last month.

Top News

In other news around the markets:

In a statement to employees, General Motors CEO Mary Barra announced that she had fired fifteen employees who responded inappropriately to the ignition switch defects or were involved in some type of misconduct. Barra said she intends to turn the company’s corporate culture around as it has created what she called a “pattern of incompetence and neglect."

Bank of America is offering to pay $12 billion in order to settle probes by the Justice Department into its handling of questionable mortgages. Around $5 billion will be used to relieve strained customers by reducing their monthly payments or decreasing their principal amount. Many expect that the bank will end up with penalties of more than the $13 billion that JP Morgan Chase & Co was made to pay last year.

• On Thursday, the Pentagon reported that the Chinese military was beefing up its arsenal with newly advanced drones, warships, jets, missiles and even cyber weapons. The US estimated China’s military spending at over $145 billion in 2013, far surpassing Beijing’s official total of $119.5 billion. China’s Defense Ministry responded with a statement on its website saying that the Pentagon’s report was erroneous.
• With several world leaders including Ukraine’s Petro Poroshenko, Russia’s Vladimir Putin and United States President Barack Obama set to attend the commemoration of D-Day landings in France on Friday, many are hoping that informal talks about the ongoing crisis in Ukraine could be a first step in easing the nation’s tension. Late on Thursday there were reports of further casualties after separatists attacked a border post in the eastern part of the country. The attack wounded five Ukrainian soldiers, but killed 15 separatists when an air strike was eventually employed to fend off the attack.

Asian Markets

Asian markets were mostly lower; the NIKKEI fell 0.01 percent, the Shanghai composite lost 0.54 percent and the Shenzhen composite was down 0.45 percent. The Hang Seng index was 0.69 percent lower, the KOSPI fell 0.65 percent, but the ASX 200 and the NZ 50 were up 0.50 percent and 0.44 percent respectively.

European Markets

European markets were up across the board; the UK’s FTSE gained 0.32 percent, the STOXX 600 rose 0.26 percent, the DAX was up 0.19 percent and the IBEX gained 0.56 percent.

Commodities

Energy futures were mixed; Brent futures gained 0.20 percent and WTI futures were down 0.03 percent. Gold and silver gained 0.11 percent and 0.19 percent respectively and industrial metals were lower with the exception of copper, which gained 0.73 percent. Aluminum was up 0.82 percent, zinc gained 0.42 percent and tin was up 0.09 percent.

Currencies

The euro was steady at $1.3630 on Friday morning after a roller coaster day on Thursday. The common currency lost 0.31 percent against the yen and 0.12 percent against the pound. The dollar was moderately lower against the yen, down 0.06 percent, but gained 0.20 percent against the franc and 0.10 percent against the pound.

Earnings

Notable earnings released on Thursday included:

• Joy Global (NYSE: JOY) reported second quarter EPS of $0.76 on revenue of $930.00 million, compared to last year’s EPS of $1.73 on revenue of $1.36 billion.
• JM Smucker Company (NYSE: SJM) reported fourth quarter EPS of $1.21, compared to last year’s EPS of $1.29 on revenue of $1.34 billion.
• UTi Worldwide (NASDAQ: UTIW) reported a first quarter loss of $0.43 on revenue of $l.04 billion, compared to last year’s loss of $0.02 on revenue of $1.08 billion.
• Thor Industries (NYSE: THO) reported third quarter EPS of $1.03 on revenue of $1.05 billion, compared to last year’s EPS of $0.92 on revenue of $1.05 billion.

Pre-Market Movers

Stocks moving in the Premarket included:

• General Electric (NYSE: GE) gained 0.41 percent in premarket trade after rising 0.83 percent on Thursday.
• Bank of America (NYSE: BAC) lost 0.97 percent in premarket trade after rising 1.45 percent on Thursday.
• Transocean Ltd (NYSE: RIG) was down 0.57 percent in premarket trade after a week of choppy trading took the stock down 0.12 percent.

Earnings

No notable earnings releases expected on Friday.

Economics

US non-farm payrolls data will be the highlight of Friday’s economic calendar, with most expecting to see a solid performance following April’s unexpectedly high figures. Other notable releases include the German trade balance, the French trade balance, Spanish industrial production, the British trade balance and US consumer credit.

For a recap of Thursday’s market action, click here.

Tune into Benzinga’s #PreMarket Prep to hear Alan Brochstein, Jacqueline Ko Matthews and Kiana Danial by clicking here!