Good morning. Happy Friday. Happy Employment Numbers Day.
The Asian/Pacific markets were mixed. Hong Kong, South Korea and the Philippines did well; India, Australia, Malaysia and Indonesia were weak. Europe, Africa and the Middle East currently lean to the upside. France, Greece, Finland, Hungary, Italy and Sweden are up; the UK and Denmark are down. S&P futures in the States were up 15 prior to the employment report and now point to a 40+ point gap up (about 45 min before the open).
————— VIDEO: Nuclear Energy is Leading the Market —————
The dollar is down. Oil and copper are up. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Payrolls in focus
As the Federal Reserve is now more confident that inflation is sustainably easing toward 2%, it is shifting some of its attention to the “maximum employment” part of its dual mandate. The Labor Department’s closely watched nonfarm payrolls report due this morning is expected to show that the labor market is continuing to ease.
Employment check: In recent months, job creation activity has moderated and the unemployment rate has risen, though it’s still at a historically low level. Fed Chair Jerome Powell recently said, “we do not seek nor welcome further cooling in labor market conditions,” indicating that jobs have become more of a concern. This week saw two key data points – job openings unexpectedly jumped in August, while private nonfarm payrolls strengthened more than expected in September.
What to expect: The nonfarm payrolls number is expected to show 132.5K jobs were added in September, down from 142K in August. The consensus may be on the low side, according to Sam Millette, director of fixed income at Commonwealth Financial Network, who wouldn’t be surprised by a move closer to 200K. Diane Swonk, chief economist at KPMG, is anticipating a subdued print of 120K, noting the slower pace of hiring, lower quits rate and smaller wage boost for people who change jobs.
SA commentary: “The markets may have fallen into a false sense of security ahead of the September job report,” cautioned Michael Kramer, who manages Investing Group Leader Mott Capital. While continuing jobless claims have remained calm, the market appears to have taken that to mean that the labor market is fine. “This leaves the market vulnerable to an upside surprise in the unemployment rate because the claims data doesn’t capture everything that goes into rising unemployment.”
What else is happening…
Port strike ends: Workers reach tentative deal with 62% wage hike.
Report: Spirit (SAVE) in talks with creditors for bankruptcy filing.
Tesla’s (TSLA) information chief exits ahead of robotaxi event.
Reality check: Duke delays shutting largest coal-fired plant.
OpenAI discloses new $4B credit facility with bank consortium.
Sen. Warren seeks growth limits on Citi (C) in letter to OCC.
GOP senators probe New York Fed on Iraq bank flows to Iran.
Lilly (LLY) GLP-1 shortage ends, Hims & Hers (HIMS) slides.
AbbVie (ABBV) cuts earnings forecast due to R&D expenses.
Risk is on for Wall Street as traders pour money into ETFs.
Today’s Economic Calendar
08:30 AM Employment Situation
09:00 AM Fed’s Williams Speech
01:00 PM Baker Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets were mixed. Japan and New Zealand did well; Hong Kong and India were weak. China and Hong Kong were closed. Europe, Africa and the Middle East are currently mostly down. Turkey is up, but Poland, France, the UAE, South Africa, the Netherlands, Italy, Austria, Sweden and Saudi Arabia are down. Futures in the States point towards a down open for the cash market.
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The dollar is up. Oil is up; copper is down. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Yen weakens
The yen has been under pressure after dovish remarks from Japan’s newly-elected Prime Minister Shigeru Ishiba and central bank policymakers pushed traders to scale back bets of another interest rate hike in the near term. The yen carry trade, which contributed to the global market meltdown in August, is also regaining momentum as traders expect the yen to weaken further.
What they said: “I don’t believe we are in an environment that requires an additional rate increase,” Ishiba said after meeting with Bank of Japan Governor Kazuo Ueda on Wednesday. Ueda said the BOJ would move cautiously on rate hikes. On Thursday, dovish BOJ policymaker Asahi Noguchi said the central bank should patiently maintain loose monetary conditions. To note, Noguchi opposed July’s rate hike as he believed Japan’s economy was vulnerable to downside risks.
Yen declines: As the odds of rate hikes dim, the yen weakened against the U.S. dollar while Japanese stocks rose. The yen (USD:JPY) briefly dropped to about 147 overnight, its lowest level in at least a month, but has since recovered to around 146.4. Japan’s benchmark blue-chip Nikkei 225 Index (NKY:IND) ended 2% higher on Thursday, a day after it closed down 2.2%.
SA commentary: The yen posted its biggest drop in over two years on Wednesday after Ishiba’s comments. This was because of “indications that the new government may not be persuaded that deflation has been defeated, and comments by Ueda suggesting that the uncertainty of the global economy may deter it from hiking rates in the near term,” said Seeking Alpha analyst Marc Chandler. He also noted that the yen is currently the weakest of the G10 currencies.
What else is happening…
Tesla (TSLA) shares slide after slight miss on Q3 deliveries.
Nvidia’s (NVDA) Jensen Huang: Blackwell demand ‘is insane.’
OpenAI valued at $157B, CEO tells investors not to back rivals.
SEC appeals court ruling on XRP (XRP-USD) in Ripple lawsuit.
OPEC calls report of Saudi minister warning of $50 oil ‘inaccurate.’
Toyota to invest $500M more in air taxi firm Joby Aviation (JOBY).
ADP report: Private nonfarm payrolls climb more than expected.
Humana Star Ratings plunge is latest in recent Medicare setbacks.
Levi Strauss (LEVI) sinks on guidance cut, potential Dockers exit.
Maui wildfire caused by Hawaiian Electric’s (HE) broken utility lines.
Today’s Economic Calendar
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
9:45 PMI Composite Final
10:00 Factory Orders
10:00 ISM Service Index
10:30 EIA Natural Gas Inventory
10:40 Fed’s Kashkari: “Featuring Frontier Research to Enhance Economic Opportunity and Inclusive Growth”
10:40 Fed’s Bostic: “Featuring Frontier Research to Enhance Economic Opportunity and Inclusive Growth”
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets were mostly down. Hong Kong did great, but Japan, South Korea, Malaysia, Indonesia and Thailand were weak. China was not open. Europe, Africa and the Middle East are currently mostly down. South Africa and Norway are doing well, but Denmark, Turkey, the UAE, Germany, Greece, Hungary, Spain and Saudi Arabia are down. Futures in the States point towards a down open for the cash market.
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The dollar is up. Oil and copper are up. Gold is down; silver is flat. Bonds are down.
Stories/News from Seeking Alpha…
Mideast fears
Fears of a wider war in the Middle East have swelled even more after Iran launched its biggest missile attack on Israel. The latest attack pushed crude oil higher and prompted a stock selloff in the U.S. on Tuesday as investors rushed to safe-haven assets.
What happened: Iran fired close to 200 ballistic missiles at Israeli military facilities on Tuesday, and the Pentagon said Israel intercepted most of the missiles with U.S. support. Damage on the ground was minimal. Tehran has since said its attack is over, unless Israel responds. Benjamin Netanyahu vowed that Iran will pay for its “big mistake.” Iran said any retaliation would invite a “crushing response,” and canceled commercial flights across the country until mid-morning Wednesday.
Market reaction: Crude oil edged higher on Tuesday after Iran’s attack, and continued to gain more than 2% overnight. Spot gold closed at its second-highest settlement ever, but has since pared gains. The greenback strengthened, with the U.S. Dollar Index (DXY) rising to as high as $101.3. U.S. stocks ended lower on Tuesday, and stock futures pointed to a lower open on Wednesday.
Expert takes: For the most part, the market fallout has been relatively muted. “Despite minimal threats to oil supplies, markets have already shown some risk-off moves,” said Charu Chanana, head of FX strategy, Saxo. “The main concern is if Israel targets Iran’s oil assets, as that could send shockwaves through global markets.” Separately, S&P Global downgraded its long-term credit ratings on Israel, given the risks of the escalating regional conflict that could persist into 2025.
What else is happening…
Job openings unexpectedly jump, hiring comparable to late 2013.
Nike (NKE) earnings: Top takeaways, peers fall with the Swoosh.
Labor board accuses Apple (AAPL) of illegal workplace rules.
U.S. touts $2B in EV subsidies while automakers shift strategies.
New preliminary duties unveiled on Southeast Asia solar imports.
Lawmakers slam ‘anti-competitive’ move by CVS, Cigna PBMs.
Lilly (LLY) looking to test Zepbound as health maintenance drug.
Lamb Weston (LW) cuts jobs, shuts plant and trims forecast.
Port strike likely to hit Q4 GDP by almost half a percentage point.
SA Chart: Which S&P 500 sectors performed best in September?
Today’s Economic Calendar
07:00 AM MBA Mortgage Applications
08:15 AM ADP Jobs Report
09:00 AM Fed’s Hammack Speech
10:05 AM Fed’s Musalem Speech
10:30 AM EIA Petroleum Status Report
11:00 AM Treasury Buyback Announcement
11:00 AM Fed’s Bowman Speech
12:15 PM Fed’s Barkin Speech
02:00 PM Treasury Buyback Results
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Good morning. Happy Tuesday.
The Asian/Pacific markets did well. Japan, Taiwan, Indonesia, Thailand and the Philippines led while Australia was weak. China, Hong Kong and South Korea were closed. Europe, Africa and the Middle East currently lean to the upside. The UK, Denmark, Poland, Germany, Greece, South Africa and the Netherlands are up moderately; Turkey, the UAE and Spain are down. Futures in the States point towards a down open for the cash market.
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The dollar is up. Oil is down; copper is up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Bowing to pressure?
Nearly two months after CVS Health (CVS) cut its annual guidance for the third quarter in a row, reports have surfaced that the healthcare services provider is exploring options to create shareholder value, including its potential breakup. The news, which comes in the wake of major investor Glenview Capital Management pushing for changes, sent CVS shares up about 2% premarket on Tuesday.
Strategic review: CVS is reportedly weighing options to turn around its business, including splitting its drugstore chain and its insurance business Aetna, and potentially housing its pharmacy benefits manager unit Caremark in either company after the potential split. However, discussions with financial advisers are ongoing, and no plans have been finalized. Meanwhile, CVS will also lay off 2,900 employees, under 1% of its workforce, to further cut costs. The move will impact corporate roles, and won’t affect front-line jobs in stores, pharmacies and distribution centers.
Backdrop: The strategic review follows a reported meeting between top investor Glenview and CVS’ leadership on Monday. The hedge fund, which owns about 1% of CVS’ outstanding shares, sought to discuss potential fixes to improve the company’s operations. CVS said it “maintains a regular dialogue with the investment community as part of our robust shareholder and analyst engagement program,” and declined to comment on any specific discussions.
SA commentary: Investing Group Leader Edmund Ingham believes it’s unlikely that a meeting with Glenview will be met with enthusiasm by CVS management, as internal plans are unlikely to dovetail with Glenview’s strategy. “In terms of breaking up the business, it is difficult to see what CVS could jettison, as finding a buyer for the retail stores could be tricky – if you don’t believe me, look at the current share price of Walgreens Boots Alliance (WBA) for guidance on how retail pharmacy store chains are performing.” (35 comments)
Easy does it
Federal Reserve Chair Jerome Powell has indicated that policymakers are not in a hurry to cut rates quickly. “We will do what it takes in terms of the speed with which we move,” he said at the National Association for Business Economics annual meeting. “If the economy evolves broadly as expected, policy will move over time toward a more neutral stance. But we are not on any preset course.” Powell noted that there are two employment reports and an inflation reading ahead of the November meeting. He signaled two more cuts this year if the economy evolves as expected. (27 comments)
Legal win
A shareholder lawsuit alleging that Tesla (TSLA) overstated the efficacy and safety of its Autopilot and Full Self-Driving technologies, misleading investors, has been dismissed without prejudice. A district judge said shareholders failed to show that Tesla and CEO Elon Musk should be liable for promising fully autonomous, hands-free driving functionality, among other assurances. In another legal news, Amazon (AMZN) won partial dismissal of an antitrust lawsuit by the Federal Trade Commission, after the company said the regulator showed no evidence of harm to consumers. (3 comments)
Strike begins
Dockworkers on the East and Gulf coasts have gone on strike, their first walkout since 1977, blocking shipments at all ports from Maine to Texas that handle about half of America’s ocean shipping. The International Longshoremen’s Association and port employers remain deadlocked on wages and protections related to automation. The ILA also claimed that the shippers “are gouging their customers that result in increased costs to American consumers.” The Conference Board, a business think tank, said a weeklong strike could cost the U.S. economy $3.78B, or $540M per day. (12 comments)
Today’s Economic Calendar
09:45 AM PMI Manufacturing Final
10:00 AM ISM Manufacturing Index
10:00 AM Construction Spending
10:00 AM Job Openings and Labor Turnover Survey
11:00 AM Treasury Buyback Announcement (Preliminary)
11:00 AM Fed’s Bostic Speech
06:15 PM A Conversation with Federal Reserve Presidents
What else is happening…
WSB survey results: Port strike will spur inflation ahead of holidays.
FTC clears Chevron-Hess deal as John Hess barred from board.
Texas Stock Exchange hires industry veterans in leadership team.
The auto industry is jolted by gloomy forecasts out of Europe.
Verizon (VZ) service outage affects more than 100,000 users.
Dell (DELL) CEO unloads shares for $1.24B in second stock sale.
Cruise line upside: Carnival (CCL) points to strong demand ahead.
Crude oil ends quarter on sour note, but gold sees historic rally.
S&P 500: Q3 Topping Process Could Turn Into Q4 Bubble Burst.
Analysis: Q3 2024 Winners And Losers And My Outlook For Q4.
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets were split with some big movers. China and Hong Kong did great; Japan, South Korea, India, Taiwan, Indonesia and the Phillipines were weak. Europe, Africa and the Middle East are currently weak. The UK, Denmark, Poland, France, Turkey, Germany, South Africa, Spain, the Netherlands, Italy and Portugal lead to the downside. Futures in the States point towards a negative open for the cash market.
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The dollar is down. Oil is flat; copper is down. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Port strike looms
Thousands of dockworkers at ports on the East and Gulf coasts from Maine to Texas are preparing to go on strike at midnight as negotiations with port employers for a new labor contract have reached an impasse. The work stoppage, which is all but certain, would be the first East Coast port strike since 1977.
What went wrong: “The United States Maritime Alliance (USMX) refuses to address a half-century of wage subjugation where ocean carriers’ profits skyrocketed from millions to mega-billion dollars, while ILA longshore wages remained flat,” said the International Longshoremen’s Association. USMX represents port employers including ZIM (ZIM) and Maersk (OTCPK:AMKBY). Union workers have been demanding better wages, automation protections and benefits, with their current contract set to expire today.
Bigger picture: The work stoppage is expected to impact more than 50% of U.S. imports, while diverted shipments will likely strain West Coast ports ahead of the busy holiday season. The strike is estimated to reduce U.S. economic activity by between $4.5B and $7.5B for every week it continues, according to Oxford Economics. Every week that cargo is stalled and backlogs created could take as long as a month to clear because West Coast ports are already operating at near capacity.
What next: Retailers, automakers, and other businesses face higher freight rates as they make contingency plans for inventory amid mounting West Coast port traffic. J.P. Morgan doesn’t see the port strike lasting longer than a week, but warned that the consumers could face higher prices or empty shelves for certain products. Take a look at the stocks and sectors that are at risk from the port strike, and don’t forget to take the WSB survey. (47 comments)
Escalating conflict
The Middle East continues to be on edge, as Israel launched airstrikes on Yemen’s port of Hodeidah on Sunday in response to recent Houthi attacks. Israel also stepped up attacks on Lebanon after killing Hezbollah leader Sayyed Hassan Nasrallah last week. U.S. Secretary of Defense Lloyd Austin said Washington “retains the capability to deploy forces on short notice.” The oil market’s reaction has been muted, as the odds of a wider war appear low for now. Meanwhile, Moody’s downgraded Israel again as economic costs mount from its war in Gaza and the intensifying conflict in Lebanon. (5 comments)
Not enough
California Gov. Gavin Newsom has vetoed an artificial intelligence safety bill, saying it only applied to the biggest and most expensive AI models, leaving others unregulated. The bill “does not take into account whether an Al system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data,” he said. “Ultimately, any framework for effectively regulating Al needs to keep pace with the technology itself.” Google (GOOG, GOOGL), Meta (META), Microsoft (MSFT) and OpenAI have criticized the bill for imposing vague standards in the name of safety. (17 comments)
Coal power exit
The U.K. will be the first G7 country to end coal power generation as its last coal-fired plant officially closes on Monday. The Ratcliffe-on-Soar plant, owned by German energy giant Uniper (OTCPK:UNPRF), has been generating electricity since 1967. The closure will end more than 140 years of coal power in Britain, an important milestone for a country that was the first to open a public coal-fired power station in 1882. “This is the final chapter of a remarkably swift transition from the country that started the Industrial Revolution,” said Dave Jones, director of global insights at think tank Ember. (3 comments)
Today’s Economic Calendar
8:50 AM Fed’s Bowman: Economic Outlook and Monetary Policy
9:45 AM Chicago PMI
10:30 AM Dallas Fed Manufacturing Survey
1:00 PM Jerome Powell: “Finding Harmony in the Noise: Transitioning to a New Normal”
What else is happening…
David Tepper: Projections for nuclear powering AI are ‘crazy.’
Microsoft-backed OpenAI sees $5B annual loss on $3.7B sales.
AT&T (T) to sell remaining 70% stake in DirecTV to TPG (TPG).
Stellantis (STLA) slashes forecast amid global industry downturn.
Nio (NIO) unit to receive RMB13.3B from parent, investors.
SA Asks: When will the Federal Reserve cut rates again?
U.S. nixes offshore wind auction for the second time this year.
Iron ore surges in Asia after China homebuying rules eased.
Amazon (AMZN) plots first live news special for election night.
Hershey (HSY), Mondelez (MDLZ) navigate market shifts.
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