Stock futures on Wall Street rose on Monday as talk swirled around the scale and speed of possible rate cut by the U.S. Federal Reserve following a weaker-than-expected jobs report. Aircraft maker Boeing (NYSE:BA) is reaching a tentative deal with its largest labor union, potentially avoiding a damaging work stoppage. Canada’s Alimentation Couche Tard (TSX:ATD) says it is committed to its $38.5 billion takeover bid for 7-Eleven-owner Seven & i Holdings (TYO:3382), despite the Japanese company rejecting the offer last week.
- Futures higher
U.S. stock futures were in the green on Monday, after stocks closed the previous session lower after the August jobs report left traders uncertain about the size of possible rate cuts by the U.S. Federal Reserve later this year. the month.
By 03:28 ET (07:28 GMT), the Dow futures had gained 188 points, or 0.5%, the S&P 500 futures had risen 29 points, or 0.5%, and the fulfillment of the Nasdaq 100 had increased by 137 points or 0.7%.
Wall Street’s key averages fell on Friday after August non-farm payrolls data showed a continued slowdown in the US labor market, almost guaranteeing the Fed will cut borrowing costs at its next two-day meeting from 17- September 18.
For the week, the benchmark S&P 500 and the 30-stock Dow Jones industrial average both posted their biggest weekly declines since March 2023, while the tech-heavy Nasdaq Composite posted its biggest drop since January 2022 .
In individual stocks, shares of Broadcom ( NASDAQ:AVGO ) fell 10.4% after the chipmaker’s fourth-quarter revenue outlook missed analysts’ expectations. Other semiconductor stocks also fell.
- Focus on the potential size of the Fed’s interest rate cut
Investors’ bets that the Fed will cut interest rates by 25 basis points stood at 73% on Monday morning, according to CME Group’s (NASDAQ:CME) closely watched FedWatch Tool.
Meanwhile, the probability of a 50 basis point cut was at 27%, after briefly crossing 50% right after the jobs data.
The odds come amid continued uncertainty over how the central bank will react to the jobs report.
“[T]he report was enough to keep markets guessing,” ING analysts said in a note. While they forecast a 50 basis point cut, the analysts said it was a “low-conviction call made on the basis that inflation fears have subsided and the Fed will want to pre-empt weakness in the [labor] market.”
On Friday, Fed Governor Christopher Waller said “the time has come” for the Fed to cut interest rates, but remained open-minded about the depth and pace of cuts.
- Boeing reached a tentative agreement with the largest union
Boeing has tentatively agreed to a 25 percent wage increase for its largest union, potentially averting a damaging strike that threatens to pile further pressure on the beleaguered airline.
Along with the wage increase, the proposed four-year deal would also include a commitment to build a new plane in the US Pacific Northwest, improved pension benefits and increased union involvement in aircraft quality.
The leadership of the union, which represents more than 30,000 workers, recommended that its members support the agreement. However, if it is rejected and two-thirds vote in favor of the strike, workers could go on strike at midnight on Friday.
A job action would strengthen control of Boeing’s new chief executive, Kelly Ortberg, who is currently trying to improve the company’s finances and restore its reputation after a dangerous mid-air hatch breach in January.
- Couche-Tard seeks talks with Seven & i after previous takeover bid rejected
Canada’s Alimentation Couche-Tard said it remains committed to a takeover bid for Seven & i Holdings, despite the Japanese owner of convenience store chain 7-Eleven rejecting a preliminary bid of $38.5 billion.
In a statement, Couche-Tard said it is “highly confident that the partnership discussions” will lead to an agreement that will increase value for Seven & i’s stakeholders.
On Friday, Seven & i’s board rejected the $14.86 per share cash offer from Circle-K-manager Couche-Tard, saying it was not in the best interests of its shareholders.
Seven & i added that Couche-Tard’s proposal, which would be the largest foreign takeover of a Japanese business ever, was “opportunistically timed” and would likely face tough antitrust hurdles in the US.
- Oil prices are moving forward
Oil prices moved higher on Monday as traders monitored the impact of a potential hurricane on the US Gulf Coast and gauged the market’s reaction to last week’s non-farm payrolls report.
By 03:29 Greek time, the Brent contract had added 1.6% to $72.17 a barrel, while US crude (WTI) futures were trading up 1.6% to $68.78 a barrel. barrel. Brent had fallen 10 percent at Friday’s close to its lowest since December 2021, while WTI had fallen to its lowest since June 2023, according to Reuters.
The US National Hurricane Center said over the weekend that a weather system in the Gulf of Mexico was forecast to become a hurricane before hitting the US’s northwestern Gulf Coast – an area vital to US refining capacity.
Elsewhere, the prospect of lower interest rates or interest rate cuts also helped support crude. In theory, a fall in borrowing costs could boost economic activity and boost demand for oil.
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Written by D Fernando
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