US stock futures are hovering near the zero line as markets prepare for a crucial non-farm payrolls report on Friday. The numbers are expected to point to a stable, if slowing, labor market picture ahead of the Federal Reserve’s two remaining meetings this year. Elsewhere, dockworkers on the US East and Gulf coasts are suspending a strike that threatened to put severe pressure on the broader economy.
- Non-farm payrolls cast their shadow
Markets are focused on the release of the September non-farm payrolls report on Friday at 8:30 a.m. ET.
The US economy is expected to have maintained modest job growth in the final month of the third quarter, while the unemployment rate is expected to be at August’s level of 4.2%.
If the Labor Department’s key numbers meet those expectations, it could reduce the need for the Federal Reserve to deliver another 50 basis point rate cut at the central bank’s upcoming meetings in November and December. The Fed announced a massive cut in borrowing costs at its meeting last month, driven in part by a desire to bolster the labor market.
Potentially impacting the report are Hurricane Helene, which ripped through parts of the US Southeast last week, and an ongoing strike by Boeing (NYSE:BA) workers in the US Pacific Northwest.
The numbers, along with job openings and private payrolls data from earlier this week, generally point to a sustained and orderly slowdown in labor demand, underpinned by mostly steady wage growth.
- Futures subdued
US stock futures were subdued on Friday as investors prepared for the release of crucial US jobs data.
At 03:27 ET (07:27 GMT), the Dow futures contract and S&P 500 futures were both largely unchanged, while Nasdaq 100 futures were up 25 points, or 0.1%.
Major indexes ended the previous session slightly lower, indicating caution ahead of the nonfarm payrolls report. Traders were also monitoring escalating tensions in the Middle East.
The benchmark S&P 500 fell 10 points, or 0.2%, the 30-stock Dow Jones Industrial Average lost 185 points, or 0.4%, and the tech-heavy Nasdaq Composite lost 7 points, or 0.04%.
In a note to clients, analysts at Vital Knowledge argued that recent stock market trends have been shaped by stimulus measures from the Chinese government and a series of interest rate cuts by global central banks that offset higher equity valuations.
“The former is preventing sustained and extended declines, while the latter is a barrier to further material gains,” the analysts said.
“We believe stimulus measures are ultimately the stronger of these two counterbalancing forces that will drive stock trends higher, but elevated [price-to-equity ratios] make stocks vulnerable to negative headlines.”
- Longshoremen suspend strike
US longshoremen on the East and Gulf coasts will suspend their multi-day strike after their union and the group representing major ocean shipping companies reached an agreement on Thursday.
The work stoppage had closed ports from Maine to Texas and threatened large parts of the US economy by affecting supply chains and imports of goods such as food and pharmaceuticals. Analysts at JPMorgan had said the strike was costing the economy up to $4.5 billion a day, the Financial Times reported.
The tentative deal calls for a wage increase of around 62% over six years, Reuters reported, citing two sources familiar with the matter. The figure would be between the 77% demanded by the International Longshoremen’s Association (ILA) union and the nearly 50% offered by the employer group United States Maritime Alliance (USMX).
In a statement, the ILA and USMX said they would extend their framework agreement until Jan. 15 next year. However, key points of contention between the two remain, including worker fears that automation at ports could lead to job losses.
Shares of shipping companies slipped after the announcement, including Denmark’s AP Moeller – Maersk (CSE:MAERSKb). Investors who had been betting on a rebound in freight rates that had recently fallen due to the strike were disappointed, analysts told Reuters.
- Seven & i Holdings considers sale of majority stake in supermarkets – reports
Japan’s Seven & i Holdings (TYO:3382) is considering a possible sale of a majority stake in its supermarket businesses, including its flagship Ito-Yokado division, according to business daily Nikkei.
The parent company of convenience store chain 7-Eleven is looking to sell the units to foreign investment funds, among others, Nikkei reported. The process is expected to begin as early as the end of this year, it added.
A Seven & i spokesman quoted by Reuters said the move was “not something our company has officially announced,” noting that there are “no decided facts at this point.”
In September, Seven & i rejected a $38.5 billion takeover offer from Canadian company Alimentation Couche-Tard. It would have been the largest foreign takeover in Japanese corporate history.
- Oil Gains
Oil prices rose slightly on Friday, on track for their biggest weekly gain in over a year on increased risks of growing conflict in the Middle East.
At 3:28 a.m. ET, the Brent contract was up 0.4% at $77.96 a barrel, while US crude (WTI) futures were trading 0.5% higher at $74.06 a barrel.
Brent crude futures were expected to gain about 8% this week – the biggest gain since February 2023, while the 8% weekly rise in US crude futures would be the biggest since March of last year.
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Reference;
Kanowsky, S. (2024) Jobs data ahead, US dockworkers suspend strike – what’s moving markets By Investing.com, Investing.com. Investing.com. Available at: https://www.investing.com/news/economy/jobs-data-ahead-us-dockworkers-suspend-strike–whats-moving-markets-3648655 (Accessed: 4 October 2024).
