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Pre-Market Primer: Job Growth Crushes Expectations; Tesla Motors Inc Wins Petition to Bypass Dealers


The US economy owes a big thanks to the leisure and hospitality industry.

Stocks are set to rise today as job creation beat expectations for June.

Last month, the US economy generated 195,000 new jobs. Most sectors reported a rise in employment, though the public sector shed 7,000 workers and manufacturing lost 6,000. The leisure and hospitality industry added the most at 75,000, up from a 14,000 rise a year ago.

Economists expected only 165,000 hires last month, which is below the six-month average of 194,000.

The unemployment rate and labor force participation rate were both unchanged in June at 7.6% and 63.5%, respectively.

Ahead of the report, stock index futures signaled optimism among traders. Dow (INDEXDJX:.DJI) futures were up 0.77% at 15,031. Futures contracts on the S&P 500 (INDEXSP:.INX) rose 0.73% to 1,620.90 and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.83% to 2,960.75.

Cyclical shares that rise with the economy such as Bank of America Corp (NYSE:BAC) also rose on optimism that the jobs report would beat expectations. BofA was up 1.09% and JPMorgan Chase & Co. (NYSE:JPM) rose 0.93% in pre-market trading. Spot gold prices were down 0.62% at $1,242.20/ounce and bond yields were up slightly at 2.56%.

European shares were mixed this morning after surging higher yesterday after European Central Bank chief Mario Draghi signaled that they might loosen monetary policy soon. German industrial data disappointed. In May, industrial orders in the eurozone's largest economy fell 1.3% on a monthly basis. In April, orders fell 2.2%. France's trade gap also suffered in May as manufacturing exports fell and import demand was flat. France imported 6 billion euros more than it imported.

Portugal's bond yields sank as prime minister Pedro Passos Coelho took steps to keep his government together. The interest rate on its 10-year bond fell 29 basis points to 7.18%.

Japan's Nikkei 225 (INDEXNIKKEI:.NI225) rallied 2.08%.

Tesla (NASDAQ:TSLA) shares rose 2.6% this morning after it forecast that it will sell 21,000 Model S vehicles this year. This is greater than the number of electric cars already on the streets of Hong Kong, the company said. Tesla also won more than 100,000 signatures on a White House petition to let it bypass the dealer model and sell directly to consumers. Tesla is currently barred from selling in several states that require a dealership license.

Samsung Electronics Co., Ltd (OTCMKTS:SSNLF) shares fell 3.8% after disappointing on earnings. Though operating profit at the Korean company was up 47% from last year in the second quarter, it missed analyst expectations. Since its April launch, Samsung sold 20 million Galaxy S4 smartphones.

Twitter: @vincent_trivett
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