Market Wraps
Watch For:
Employment Report for September; Canada Labour Force Survey for September
Today’s Top Headlines/Must Reads:
– Is The Economy Cooling or Revving Up? The September Jobs Report Will Offer Clues
– Monetarism Is Back. It May Not Last.
– Exxon Doesn’t Need Luck for Pioneer Deal to Be a Winner
Opening Call:
Stock futures were higher on Friday ahead of the last jobs report before the Federal Reserve’s next interest-rate decision.
“Since pricing for another rate hike this year has kept oscillating above and below 50% [currently 38% this morning], today’s reading will be important in determining if another hike remains on the table,” Deutsche Bank said.
Besides the jobs report, a report in the Wall Street Journal that Exxon Mobil is near a $60 billion deal buy Pioneer Natural Resources may color energy stocks on Friday.
Pioneer shares rose more than 11% premarket, while Exxon fell 1.8%.
More Premarket Movers
Aehr Test Systems reaffirmed its fiscal 2024 guidance despite improved fiscal first-quarter profit and a revenue jump of 93%. Shares fell 13%.
Levi Strauss said it was lowering its financial forecasts “given the ongoing uncertainty in the macro environment.” The stock was down 1.3%.
Philips’ U.S.-listed shares fell more than 10% after the FDA on Thursday said it wasn’t satisfied with the company’s recall of its sleep apnea devices and called for more testing. Philips’ U.S.-listed shares fell more than 10% in premarket trading.
Rivian Automotive rose 1.6% in premarket trading after tumbling 22.9% on Thursday, the stock’s largest percentage drop on record. The plunge came after it issued disappointing guidance and announced plans to raise more funds.
Tesla cut prices of its Model 3 and Model Y vehicles in the U.S., according to its website. Shares declined 1.3%.
Thursday’s Post-Close Movers
CalAmp’s second-quarter revenue fell 15% to $61.7 million, missing analysts’ estimates, and the company reported another quarterly loss. It expects its revenue and adjusted earnings to fall sequentially in the fiscal third quarter. Shares fell 12%.
Cano Health said it had filed preliminary proxy statements on holding a vote to allow the board to effect a 1-for-60 reverse stock split. If shareholders approve the measure, Cano’s board will have the ability to adjust the ratio down to 1-for-5 and up to 1-for-100 as the company seeks to regain compliance with the NYSE’s price requirement for listing. Shares fell 6%.
Forex:
The dollar has fallen from multimonth highs in recent days after weaker-than-expected ADP jobs data lessened the prospect of interest rates staying higher for longer, but nonfarm payroll figures could reverse that trend, ING said.
“A strong read could easily put markets back on a bearish track and reignite aggressive dollar buying,” ING said.
“There is a decent chance that markets are positioned for a modestly sub-consensus read in jobs figures today, and even a consensus figure could send the dollar higher.”
The DXY dollar index could rise back above 107 today or early next week, ING added.
Bonds:
High-yield bonds are a better investment than equities as they provide competitive yields above 9% and less risk compared to equities, Insight Investment said.
The recent selloff in equities and bonds is a great opportunity to buy high-yield corporate bonds where credit metrics, interest coverage ratios and cash balances remain strong, it added.
Corporate earnings however, face growing headwinds and this could “translate into more downgrades, but not necessarily a significant rise in defaults.”
Energy:
Oil prices ticked higher in early European trading, but were on course for a massive weekly loss, after rising gasoline inventories in the U.S. triggered a sell-off for both Brent and WTI.
“The recent correction in oil prices has been too rapid and was largely unwarranted in our view,” Barclays said.
The U.K. bank said that too much attention had been paid to weekly demand estimates, adding that other U.S. economic data shows the U.S. economy to be strong.
It maintains its $92 a barrel estimate for Brent this quarter.
Metals:
Base metals were mixed, while gold edged up in early London trading, with weak demand in China continuing to pressure prices.
BMI said that “copper LME inventories have ticked upward in recent weeks, reaching a new year-to-date high of 167,600 tons on October 4 which has fueled the recent price decline.”
It added that it only expects slight improvement to industrial metal prices in the fourth quarter, with prices generally averaging lower in 2023 than in 2022.
Today’s Top Headlines
Philips Shares Tumble After FDA Asks for More Tests on Sleep-Apnea Device
Shares of Royal Philips fell sharply after the U.S. Food and Drug Administration said it is unsatisfied with the status of the company’s recall of devices to treat sleep apnea and asked for additional testing.
At 0841 GMT on Friday, shares in the Dutch health-technology group traded 9.3% lower at EUR16.84.
Can Someone Lose Track of Billions of Dollars? Sam Bankman-Fried’s Jury Will Decide
Sam Bankman-Fried’s bid to beat federal fraud charges could boil down to one question: Is it possible to lose track of $8 billion through an honest mistake?
Bankman-Fried has said that his trading firm, Alameda Research, failed to realize that it owed a giant debt to FTX until it was too late, according to his interviews and writings after the exchange’s collapse. He attributed the failure to sloppy accounting and blamed underlings, describing himself as an aloof chief executive too removed from daily operations to know what was going on.
Tesla Cuts Prices of Model 3, Model Y Vehicles in U.S.
Tesla cut prices of its Model 3 and Model Y vehicles in the U.S., its website showed.
The electric-vehicle company on Thursday lowered the price on its Model 3 rear-wheel drive to $38,990 from $40,240, according to its website. Prices of the Model 3 long-range and performance cars were reduced to $45,990 and $50,990, respectively.
Japan Says Continued One-Way Yen Moves Can Be Seen as Excessive
TOKYO-Japan’s Finance Minister Shunichi Suzuki said the government will consider various factors when judging whether the yen’s moves are “excessive.”
If one-way movements continue, it could be seen as excessive, Suzuki said Friday. He has said that the government stands ready to take action in the foreign-exchange market if excessive declines in the yen continue.
Temporary Speaker Patrick McHenry Steers House on the Fly
WASHINGTON-Just moments after the stunning ouster of Kevin McCarthy as speaker, a clerk revealed the name of the new, temporary leader: Rep. Patrick McHenry of North Carolina. He now faces the hardest job on Capitol Hill.
The bow-tied House Republican veteran, the top entry on a secret list prepared by McCarthy as part of post-9/11 protocols, is charged with running the chamber until a new leader is elected. That contest could be resolved next week but could also stretch longer, given the deep fractures within his party. Both of the candidates so far-House Majority Leader Steve Scalise (R., La.) and Judiciary Committee Chairman Jim Jordan (R., Ohio)- have broad bases of support, and neither had a clear lead as of Thursday.
Who Will Be the Next House Speaker? A Look at the Race So Far
Several Republican lawmakers are looking to be the next speaker, after the House ousted Rep. Kevin McCarthy. A vote is expected as soon as next week. Just after midnight Friday, former President Donald Trump weighed in with a key endorsement, backing Rep. Jim Jordan (R., Ohio).
To win support, the speaker candidates will rely on personal connections as well as staking out positions on GOP priorities such as tightening border security, stepping up the impeachment investigation into the Biden family’s finances and cutting government spending. They will also have to balance competing party positions on Ukraine aid.
Nobel Peace Prize Awarded to Imprisoned Iranian Activist Narges Mohammadi
Jailed Iranian activist Narges Mohammadi was awarded the Nobel Peace Prize for her fight against the oppression of women in Iran and her efforts to promote human rights and freedom.
Mohammadi is one of Iran’s leading human-rights campaigners and has long spoken out for women’s rights and the abolition of the death penalty.
Putin Says Grenade Fragments Found in Wreckage of Prigozhin’s Plane
Russian President Vladimir Putin said fragments of hand grenades were found in the victims of a plane crash that killed the Wagner Group’s founder, Yevgeny Prigozhin, and suggested that the flight was brought down by an explosion from within.
Prigozhin was killed when the Embraer jet carrying him and other Wagner paramilitary officials crashed after takeoff from Moscow in August. Putin’s assertion Thursday is in line with a Kremlin-controlled media campaign that has suggested different theories about Prigozhin’s death. The campaign has ignored indications that Prigozhin was killed by the Kremlin over his abortive mutiny this summer.
Source: Dow Jones Newswires