LIVE MARKETS-US stock futures slip, 10-year yield flat, after latest data on jobs, retail sales

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US STOCK FUTURES SLIP, 10-YEAR YIELD FLAT, AFTER LATEST DATA ON JOBS, RETAIL SALES

The main U.S. equity index futures are slightly lower after the release of the latest data on jobs. The U.S. Bureau of Labor Statistics on Tuesday released its long-awaited combined employment reports for October and November, but a number of key details are missing after the government shutdown prevented data collection, including October's unemployment rate, resulting in the first-ever gap in that critical data series.

October retail sales numbers were also released.

E-mini S&P 500 futures EScv1 are now off around 0.2% vs. a loss of around 0.1% just before the data came out. The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.18%. It was around 4.17% just before the numbers came out. The yield ended Monday at 4.182%.

According to the BLS, a combined total of 64,000 jobs were created vs. an estimate of 50,000. The November unemployment rate was 4.6% vs. a 4.4% Reuters Poll. The prior read was 4.4%.

Wage data on a month-over-month and a year-over-year basis was cooler-than-expected.

October retail sales month-over-month came in at 0.0% vs. a 0.1% estimate. Ex-autos month-over-month was 0.4% vs. a 0.3% estimate.

According to the CME's FedWatch Tool, the probability that the Fed sits on its hands and leaves its current target rate of 3.50%-3.75% unchanged at its January 27-28 FOMC meeting is now around 77% vs. 76% just before the data was released. The chance that the FOMC cuts rates by 25 basis points is now around 23% vs. 24%.

Interest rate probabilities are now pricing in a total of about 59 basis points of cuts through December 2026 vs. around 57 basis points just before numbers came out.

S&P 500 index .SPX sector SPDR ETFs are mixed in premarket trade. Energy XLE.P, off around 0.7%, is taking the biggest hit. Staples XLP.P and financials XLF.P, both up around 0.1%, are posting the biggest gains.

The SPDR S&P regional banking ETF KRE.P is up around 0.1%.

Regarding the data, Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said:

"The nonfarm payroll data drought is over, but the data show the labor market was a barren wasteland basically since April. The more recent data from ADP indicates the labor market may have turned a corner in mid-November, though."

Jacobsen added "In October, the DOGE effect was in full effect with a drop in government employment of 162,000. All the employees who accepted a deferred resignation fell off the payrolls then, so they were on the payrolls, but not working up to that point."

As for the data's implications for the Fed, Jacobsen said, "The more dovish members of the Fed might feel a little vindicated as the unemployment rate has moved up to 4.6%, which is at the high-end of the participants’ guesses of where it would end this year. A January cut may not be likely, but a March cut can’t be ruled out."

As for retail sales, Jacobsen said, "In October, private sector payrolls expanded by 52,000, but we all know that because of the benchmark revisions announced back in August that the real number is probably closer to -5,000. Despite that, retail sales held up pretty well in October. Consumers will do what they do best, which is consume, even in the face of job market uncertainty."

Jacobsen's bottom line is that "October and November could be the inflection point for the labor market to emerge from the rough patch and to start getting some traction in 2026. The labor market lags GDP, so cap-ex spending and profit growth can help pull the labor market along."

The December S&P Global Manufacturing PMI Flash and Services PMI Flash are both due at 9:45 a.m. Estimates call for 52.0 and 54.0 vs prior readings of 52.2 and 54.1.

Here is a premarket snapshot from around 8:55 a.m. ET:

(Terence Gabriel, Chuck Mikolajczak)

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