Payrolls, China COVID Pivot, Tech Layoffs – What’s Moving Markets


By Geoffrey Smith — The US releases its official labor market report for October, which is expected to show that hiring slowed again last month as the economy cooled. That’s a picture confirmed in real-time with the announcement of layoffs and hiring freezes at some high-profile tech companies. Chinese stocks raced to their best week in 11 years as hopes grew to end the Zero-COVID policy. That in its wake has dragged up commodity prices and mining stocks. Elon Musk plans to swing the ax on Twitter, but a fat list of major advertisers has already beaten him. Here’s what you need to know in the financial markets on Friday, November 4.

1. Job report set to show hiring delay

It’s pay day. The numbers may not quite have the impact they usually have, as they come just two days after the latest Federal Reserve decisions and guidelines, which made it clear that something notable will be needed to keep the central bank from raising further. to next year.

The report may not even have the same psychological impact as Thursday’s reports that tech giants like Apple (NASDAQ:) and Amazon (NASDAQ:) — previously hoping to be immune to the broader slowdown — are halting hiring, at least in some countries. parts of their business.

Analysts expect an increase of 200,000, which is less than the estimate of 239,000 private sector jobs in the month. Growth is also expected to have slowed to 4.7% from 5.0% in September, not least as job growth in recent months appears to have been strongest in (usually lower-paying) liberalized jobs. time and in the hospitality industry. It is seen ticking up to 3.6% from 3.5% last month.

2. The China pivotal story has begun again

Job numbers may struggle to revive the Fed pivot story, but China’s Zero-COVID pivot story is alive and kicking after two seemingly significant overnight news stories.

Bloomberg reported that Chinese authorities are considering abolishing a system that penalizes airlines for bringing COVID carriers into the country, while one of the country’s top epidemiologists told an investment conference that he could make substantial changes to the country’s health within five or six months. policy expected.

Hong Kong jumped another 5.4% on the news, ending its best week in 11 years in hopes that a policy that has been a major drag on growth this year will finally be scrapped (even if the country’s health regulators not willing to say so yet in public).

Base metals and mining stocks also rose.

3. US stocks up on Chinese news; PayPal’s Prospects Disappoint

US stock markets are expected to open higher, helped by the prospect of a pivot in China. The news of layoffs at Lyft (NASDAQ:) and Stripe, along with a partial employee freeze at Amazon, has also bolstered expectations of a weak payroll report that should eventually feed into a softer Fed policy.

At 06:25 ET (10:25 GMT), they were up 170 points or 0.5%, while they were up 0.7% and up 0.8%. Nevertheless, the three main cash indices are all on course for a weekly loss, thanks to the sell-off that followed the Fed’s aggressive press conference on Wednesday.

Stocks likely to come into the picture later are (NASDAQ:) and (NASDAQ:), both of which beat expectations with their quarterly results late on Thursday. Although in PayPal’s case it was a disappointingly weak revenue forecast that caught the eye. Duke (NYSE:), AES (NYSE:) and Dominion Energy (NYSE:) will all report early, as will Cardinal health (NYSE:) and troubled FuboTV (NYSE:).

4. Musk will announce job cuts on Twitter if advertisers pull out

The magnitude of Elon Musk’s ax swing on Twitter (NYSE:) will become apparent amid swirling rumors that the CEO of Tesla (NASDAQ:) plans to lay off as many as half of the company’s 7,500 employees.

“In an effort to put Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday,” Musk wrote in an email to staff on Thursday.

The company certainly looks set to face some tough times in the future as major advertisers such as L’Oréal (EPA:), Mondelez (NASDAQ:), Volkswagen (ETR:), Audi and General Mills (NYSE:) suspended all postings to Twitter this week over concerns about Musk’s content policies. The company’s Chief Commercial Officer, Sarah Personette, who was responsible for dealing with advertisers, has also resigned.

5. Oil picked up by Chinese news; rig count, CFTC numbers expected later

Crude oil joined the rally sparked by news out of China, rising overnight to its highest level in nearly four weeks.

At 6:35 a.m. ET, futures were up 3.2% to $91.03 a barrel, while they rose 2.8% to $97.36 a barrel.

The rise in prices reflects how ill-equipped the world oil market is to cope with a significant increase in Chinese demand, given the lack of spare capacity. The data from Baker Hughes and the CFTC may shed more light on that later.

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