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Investing.com - Here are the top five things you need to know in financial markets on Friday, August 3:
1. Wages in focus in jobs report
The U.S. Labor Department will release the nonfarm payrolls report for July at 8:30AM ET on Friday, and it will be watched more for what it says about wages than hiring.
The consensus forecast is that the data will show jobs growth of 193,000, after adding 213,000 positions in June, while the unemployment rate is seen inching down to 3.9% from 4.0%.
However, most of the focus will likely be on average hourly earnings figures, which are expected to rise 0.3%, a tad faster than the 0.2% increase a month earlier. On an annualized basis, wages are forecast to increase 2.7%, the same gain reported in June.
A spike could put the Federal Reserve on notice about inflation as it considers more rate hikes. The Fed said this week it would continue to gradually raise rates should the economy continue to show "sustained expansion," supported by a strong labor market and close-to-target inflation.
2. Japan overtakes China as world’s 2nd largest stock market as tariffs weigh
Chinese stocks have been pummeled by worries over tariffs, losing $2.29 trillion in value since a January high and falling into third place among the world’s biggest stock markets.
As of Thursday’s close, Bloomberg data showed that Chinese equities were worth $6.09 trillion, falling below the $6.16 trillion value of Japanese shares. U.S. stocks remained the biggest market at $31 trillion.
The escalation of trade tensions between the U.S. and Beijing has sent Chinese stocks on a nosedive along with the yuan.
The Chinese currency hit a 15-month low against the dollar early Friday, heading for its eighth straight weekly decline, the longest run since the start of the country’s modern foreign-exchange rate regime in 1994.
China's services sector expanded at the weakest pace in four months in July, as there was the least growth in new business since December 2015, a private survey showed on Friday.
Forward-looking sentiment meanwhile was the second-weakest on record, with respondents blaming concerns surrounding company restructuring and the impact of the U.S.-China trade war.
3. U.S. futures cautious ahead of jobs report
U.S. futures pointed to a flat open on Friday as traders switched to a cautious stance ahead of the jobs report. A day earlier, the Nasdaq Composite ended with gains of 1.24%, boosted by buying furor in Apple (NASDAQ:AAPL) that took the tech giant’s market cap beyond the $1 trillion mark.
At 5:55 AM ET (9:55 GMT), the blue-chip Dow futures edged forward 2 points, or 0.01%, S&P 500 futures were unchanged, while the Nasdaq 100 futures inched up 6 points, or 0.08%.