U.S. Stocks Set To Open Lower As Traders Search For New Catalysts After The Rally

Unemployment Rate Declines To 6.9%

U.S. has just provided Non Farm Payrolls and Unemployment Rate reports for October. Non Farm Payrolls increased by 638,000 compared to analyst consensus which called for an increase of 600,000.

Unemployment Rate was much better than expected and declined from 7.9% in September to 6.9% in October compared to analyst consensus of 7.7%.

The new reports were a bit surprising after modest Initial Jobless Claims and Continuing Jobless Claims reports which were provided on Thursday, and the disappointing ADP Employment Change report, which was published on Wednesday.

Jerome Powell Says That The Fed Has Not Run Out Of Ammo

Yesterday, U.S. Fed left the interest rate unchanged and promised to support the economy as long as necessary. Fed Chair Jerome Powell also stated that the Fed did not run out of ammunition.

However, the Fed did not announce any new supportive measures, and it looks like Jerome Powell would prefer to see a new coronavirus aid package from the U.S. government before providing more support from the central bank.

Meanwhile, the result of U.S. presidential election is not yet known, and it is possible that votes may have to be recounted in states where competition between Trump and Biden was especially intense, further delaying the annoncement of the winner.

Currently, S&P 500 futures are losing ground in premarket trading as stocks look set for a pullback after the recent rally. However, they have started to rebound after the release of strong employment reports.

Oil Drops Below $38 On Virus Worries

Yesterday, WTI oil failed to continue its upside move despite the widespread optimism in the markets. Today, it is trying to settle below the $38 level on worries about the continued coronavirus surge.

On Thursday, the U.S. reported a record increase in the number of new COVID-19 cases. While the U.S. is preoccupied with the election battle, the oil market is worried that the recent surge in the number of new cases may lead to new lockdowns.

Not surprisingly, many oil-related stocks are losing ground in premarket trading and may be set for a challenging trading session.

For a look at all of today’s economic events, check out our economic calendar.