Looming NFP Data Could Mean Choppy US Stocks Trading

The major US index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to show a lack of direction following the rally seen in the previous session.

The S&P 500 has gone back and forth during the US session, sitting below the 200 day EMA, as traders keep worried about the jobs number on Friday. It is probably only a matter of time before markets witness an explosive move. This resistance should hold, but if US equities break above the 4200 level, the S&P 500 could take off.

Traders may be reluctant to make significant moves ahead of the release of the Labour Department’s closely watched monthly jobs report on Friday. The report is expected to show employment increased by 250,000 jobs in July after jumping by 372,000 jobs in June. The unemployment rate is expected to hold at 3.6 percent.

The strength of the jobs report could impact the outlook for interest rates, although the Federal Reserve will have much more data to digest before their next meeting in September. A day ahead of the release of the more closely watched monthly jobs report, the Labour Department released a report showing a modest increase in first-time claims for US unemployment benefits in the week ended July 30.

The report showed initial jobless claims crept up to 260,000, an increase of 6,000 from the previous week’s revised level of 254,000. Economists had expected jobless claims to inch up to 259,000 from the 256,000 originally reported for the previous week.

The Commerce Department released a separate report this morning showing the US trade deficit narrowed by more than expected in the month of June.

The rebound on Wall Street, on Wednesday, partly reflected a positive reaction to some upbeat US economic data, which helped ease concerns about a recession.