As investors warily await the crucial U.S. jobs report that will help determine whether the Federal Reserve will decrease or keep interest rates later this month, December S&P 500 E-Mini futures (ESZ24) are drifting down -0.08% this morning.
The main indices of Wall Street closed yesterday’s trading session lower. After the chip design software company gave below-expected 2025 revenue guidance, Synopsys (SNPS) fell more than 12% and was the biggest percentage loser on the S&P 500 and Nasdaq 100. Additionally, when the cybersecurity company revealed a larger-than-expected Q3 loss, SentinelOne (S) fell more than -13%. Additionally, after lowering its full-year comparable sales guidance and revealing lower-than-expected Q3 revenue, American Eagle Outfitters (AEO) fell more than 14%. On the optimistic side, following the release of positive FQ2 earnings, Brown-Forman (BF.B) increased by more than 10% and was the top percentage gainer on the S&P 500. Additionally, after BofA increased its price objective on Tesla (TSLA) from $350 to $400, the stock saw a gain of more than 3%.
In contrast to the 215K anticipated, the number of Americans filing initial unemployment claims in the last week increased by +9K to a 6-week high of 224K, according to the Labor Department’s report released on Thursday. Additionally, the U.S. trade deficit decreased from -$83.80 billion in September to -$73.80 billion in October, which was better than the -$75.70 billion forecast.
According to Morgan Stanley’s Chris Larkin at E*Trade, “[Friday’s] monthly jobs report will give us a more complete picture, but for the time being, the story continues to be a labor market that occasionally appears to bend but avoids breaking.”
At the monetary policy meeting in December, U.S. rate futures have priced in a 32.5% likelihood of no rate move and a 67.5% chance of a 25 basis point rate drop.
The U.S. monthly payroll report, which is scheduled to be issued in a few hours, is the center of attention today. On average, analysts predict that November’s nonfarm payrolls will total 218K, up from October’s 12K.
According to a 22V Research survey, 45% of investors believe that important U.S. employment statistics will be “mixed/negligible.” 23% expect it to be “risk-on,” while 32% expect it to be “risk-off.”
Today’s focus will also be on the U.S. Average Hourly Earnings data. In contrast to the prior statistics of +0.4% m/m and +4.0% y/y, analysts anticipate November data to be +0.3% m/m and +3.9% y/y.
Today, the unemployment rate in the United States will be released. In November, economists predict that this percentage will stay constant at 4.1%.
Today, the U.S. Consumer Sentiment Index from the University of Michigan will be released. From last month’s figure of 71.8, economists predict that the preliminary December result will be 73.1.
Today, U.S. Consumer Credit statistics will also be made public. In contrast to the previous figure of $6.00B, economists predict that this amount will be $10.10B in October.
Today, the unemployment rate in the United States will be released. In November, economists predict that this percentage will stay constant at 4.1%.
Today, the U.S. Consumer Sentiment Index from the University of Michigan will be released. From last month’s figure of 71.8, economists predict that the preliminary December result will be 73.1.
Today, U.S. Consumer Credit statistics will also be made public. In contrast to the previous figure of $6.00B, economists predict that this amount will be $10.10B in October.
The speeches of San Francisco Fed President Mary Daly, Cleveland Fed President Beth Hammack, and Chicago Fed President Austan Goolsbee will also be anticipated by market participants.
The benchmark 10-year U.S. Treasury note yield is up +0.32% in the bond market, at 4.195%.
As investors continued to keep an eye on French political developments and awaited the important U.S. jobs report, the Euro Stoxx 50 futures are up +0.34% this morning. Friday saw a surge in luxury stocks. The Eurostat final figures, which was made public on Friday, verified that the Eurozone GDP grew by 0.4% during the third quarter. Separately, figures from the Federal Statistical Office revealed that October saw another decline in Germany’s monthly industrial production, underscoring the sector’s persistent difficulties. In the meantime, French President Macron promised to build a “government of general interest” and name a new prime minister within the next few days. The National Rally’s leader, Marine Le Pen, told Bloomberg News that a budget could be presented in a matter of weeks.
In business news, Direct Line Insurance Group Plc (DLG.LN) increased more than 6% following Aviva Plc’s sweetened purchase bid.
Today, data on Germany’s industrial production, the GDP of the Eurozone, and the employment change of the Eurozone were made public.
Compared to the forecast of +1.0% m/m, the German October Industrial Production came in at -1.0% m/m.
The third-quarter GDP of the Eurozone was reported to be +0.4% q/q and +0.9% y/y, as anticipated.
In the third quarter, Eurozone Employment Change was as expected at +0.2% q/q and +1.0% y/y.
The Asian stock markets ended the day in a mixed state. The Nikkei 225 Stock Index (NIK) of Japan closed down -0.77%, while the Shanghai Composite Index (SHCOMP) of China closed up +1.05%.
Ahead of a crucial policy conference next week, Chinese officials are expected to unveil further stimulus measures, which is why the Shanghai Composite Index closed higher today. The benchmark index saw a weekly increase for the second week in a row. Stocks in technology and insurance did well on Friday. Positive mood following media reports that U.S. senators are discussing a potential compromise on the Biosecure Act also helped healthcare equities gain pace. Investors are anticipating possible policy revisions at the Central Economic Work Conference in the meanwhile. Earlier this week, Bloomberg News reported that the country’s senior leaders will begin their annual closed-door meeting on Wednesday to lay out stimulus programs and economic targets for 2025.
As policymakers step up measures to support development and combat deflation, Wall Street banks are also beginning to anticipate that the People’s Bank of China would carry out its biggest interest rate cuts in a decade next year. Morgan Stanley and Goldman Sachs are two of the corporations predicting a 40 basis point reduction in the PBOC’s main policy rate in 2025. With intentions to apply for a 124 million yuan loan to help support the acquisition of an acetate fiber company, Yibin Paper Industry saw a 10% increase in corporate press.Ahead of the announcement of important U.S. jobs data later today, investors booked profits after four days of advances, which caused Japan’s Nikkei 225 Stock Index to close lower today. Due to overnight losses in their U.S. counterparts, chip stocks were among the worst performers on Friday. The benchmark index finished the week higher despite Friday’s decline. After two months of falls, real earnings in Japan climbed in October at the fastest rate in 32 years, according to government data released on Friday. The Bank of Japan may decide to raise interest rates in December as a result of this.
Separately, early data from the Cabinet Office revealed that October saw a larger-than-expected decline in Japan’s leading economic indicators index, which predicts the country’s economic prospects for the coming months based on information like consumer sentiment and job offers. Furthermore, data indicated that the rate of decline in Japanese household expenditure in October was slower than expected. The head of Japan’s biggest opposition party, Yoshihiko Noda, told Reuters on Friday that the BOJ should continue to reduce its contentious stimulus program and raise interest rates.
According to a Reuters poll, the Japanese economy probably expanded in the third quarter at the same mild rate as first thought. However, a brief increase in private consumption may raise questions about how policymakers perceive the economic outlook. Taking into consideration the implied volatility of Nikkei 225 options, the Nikkei Volatility finished at 22.92, up +3.10%.
The October household spending figures for Japan were better than the forecasts of +0.4% m/m and -2.6% y/y, coming in at +2.9% m/m and -1.3% y/y.
Compared to forecasts of 108.9, the Japanese October Leading Index came in at 108.6.
U.S. Pre-Market Stock Movers
After the cosmetics retailer revealed better-than-expected Q3 results and increased its full-year EPS expectations, Ulta Beauty (ULTA) jumped more than 11% in pre-market trade.
After the sportswear retailer reported strong Q3 results and increased its full-year expectations, Lululemon Athletica (LULU) increased more than +8% in pre-market trade.
Following the company’s positive Q3 results and above-consensus Q4 revenue expectations, DocuSign (DOCU) surged around 15% in pre-market trade.
Pre-market trading saw GitLab (GTLB) rise more than +9% following the release of better-than-expected Q3 results and an increase in its annual expectations.
In pre-market trading, Altria Group (MO) increased by over 1% following BofA’s upgrade of the company from Neutral to Buy, with a price objective of $65.
