Equity futures are deep in the red this morning after substantial losses yesterday. The culprit continues to be European sovereign debt concerns in Greece, Portugal and Spain, which is sending European and Asian stocks rapidly south.

Labor data from the US isn’t helping as jobless claims unexpectedly rose to 480k yesterday. The big questions today are how did January employment perform, and what impact can it have on the markets?

Yesterday the Dow fell 268 points, or 2.61%, putting the the industrial index into four-digits for the first time since early November. The S&P 500 performed even worse as it shed 3.1% ― its worst single-day decline in nine months ― effectively erasing three months of gains.

“The deepening correction in stocks has now cut the Dow 6.7% from its January 19 peak and the S&P 500 by 7.6%,” noted economists from BMO.

Ahead of the opening bell this morning, the Dow looks to open 60 points lower at 9,919 while futures on the benchmark S&P 500 are off 7.9 points to 1,053.8.

With risk nowhere close to being on the table, the US dollar has been strengthening against a broad array of currencies.

Key Events Today:

8:30 ― The month’s most important economic release, Nonfarm Payrolls, may once again disappoint. The consensus from economists is a cautious zero (that is, no growth or decline is expected.) But estimates range from 40k losses to a gain of 75k jobs. The report follows the disappointing 85k loss in November and the slight gain in October.

“The oscillating behavior between job loss and job gain, which is typical at turning points in the labor market, is an encouraging sign that consistent jobs growth will be here soon,” said Ellen Zentner, senior macroeconomist at BTMU. 

Meantime, most analysts are expecting the Unemployment Rate to tick up one-tenth to 10.1% in January due to technical differences between the household employment numbers and nonfarm payrolls.

3:00 ― Consumer Credit took a nosedive in November, contracting by $17.5 billion in the month to mark the 10th straight subtraction. The month’s decline is the largest drop on record and a rebound isn’t expected just set. 

“In general, US households are still deleveraging and we expect outstanding consumer credit to continue to dwindle for some time,” said analysts from Nomura.

The consensus for consumer credit to shed another $8.4 billion in December, in large part because of revolving credit.