Prepare for a rough day in the markets.

Not only is the monthly employment report hitting the wires at 8:30, but the New York Times reported the FHFA is ready to sue more than a dozen banks in federal court over their alleged misrepresentation of mortgage-backed securities that later turned toxic.

The suits, expected in the coming days, are aimed at financial firms like Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank.

"Investors fear that if banks are forced to pay out billions of dollars for mortgages that later defaulted, it could sap earnings for years and contribute to further losses across the financial services industry, which has only recently regained its footing," the NYT reported.

Treasuries are little moved in early trading, perhaps because yields are already so low. The two-year is steady at 0.18%, the 10-year is holding at 2.13%, and the 30-year yield is one basis point higher at 3.51%.

Equities fell more than 1% on Thursday, eating into four days of gains. Now, the S&P 500 looks to open down 10.8 points lower at 1,190.50 and Dow futures are 91 points lower at 11,374.

Bank of America, whose shares dropped 3.2% Thursday, is down 1.4% is pre-market trading.

Meantime, light crude oil fell 0.88% overnight to $88.16 per barrel, while gold prices are 1.40% higher at $1,854.80.

Key Events Today:

8:30 - Great uncertainty hangs over this month's Employment Situation. Economists speak of unpredictable government policy and weak sentiment conspiring to keep businesses from adding to payrolls. Last month's total gain of 117k jobs was much better than expected but still too weak to keep up with population growth; this month, the latest estimates expect just 53k net jobs would be added to the economy.

Economists at Nomura Global Economics are even forecasting a decline in total nonfarm payrolls of 5k.

"A data release in line with our forecast will lead many to conclude a new recession began in August," they wrote. "Businesses likely shut the door on hiring as the economic outlook became even more 'unusually uncertain' amid fears of European contagion and stock market volatility. Surveys of business confidence that have pointed to stalled hiring intentions, slower growth in withheld income tax receipts, and the sharp decline in the Philly Fed's survey all point to little or no job growth in August."

Others note that government jobs are being cut across the federal, state, and local level, while the Verizon strikes will subtract 45,000 jobs.

"Payroll employment has been on a rollercoaster ride all year, buffeted by weather and  some residual seasonal swings," said Citigroup. "The July print was the first that was anywhere near what could be considered a trend-like gain. Since that reading, however, there has been a notable deterioration in business sentiment. The events in Washington surrounding the debt ceiling/budget negotiations have prompted firms to question the outlook and their own expansion plans. 

"Thus far, the weakness has been centered in surveys, while hard data actually improved into early August. But we worry that firms may have been slow to hire workers during the negotiations, particularly those that do business with government. This could dampen the August payroll tally."

Meantime, the Unemployment Rate is expected to remain at 9.1%.