North American Morning Briefing: Stock Futures Steady as Investors Brace for Jobs Friday

OPENING CALL

Stock futures were flat early on Friday and traders were wagering on a big swing in the stock market after the monthly jobs report data.

Market participants are betting on a 1% move for the S&P 500, according to Option Research & Technology Services.

Traders are pricing in a roughly 1.7% move in the Russell 2000, which is typically sensitive to news about the economy.

Today's readout could have big implications for the ongoing stock-market rotation.

The S&P 500 Value index outperformed its growth counterpart by 4.9 percentage points in July through September, its largest quarterly outperformance since the last three months of 2022.

The value index includes stocks like Chevron, Home Depot and JPMorgan Chase, which are especially sensitive to the economy's ups and downs.

Though the market has been calm in recent sessions, there has been turbulence elsewhere and investors are bracing for big moves ahead, for example trading in call options tied to a popular oil exchange-traded fund hit a two-year high this week.

Looking ahead, next week brings quarterly results from some of the biggest names in finance, a key inflation readout and minutes from the Federal Reserve's momentous September meeting.

Premarket Movers

EVgo shares were up, extending gains after shares jumped on Thursday after receiving a conditional commitment for a $1.05 billion loan from the Department of Energy.

Palantir Technologies was up 0.9% after shares rose 4.7% in the previous session.

Spirit Airlines has been in discussions with bondholders over the terms of a potential bankruptcy filing in the wake of its failed merger with JetBlue Airways, The Wall Street Journal reported, citing people familiar with the matter. Shares fell 29%.

Trump Media & Technology stock fell slightly after the company said COO Andrew Northwall resigned.

Postmarket Movers

Martin Midstream Partners said it is selling itself to Martin Resource Management at a premium. Shares rose 10%.

Smart Sand's board authorized $10 million in share repurchases and declared a special. Shares gained 15%.

Watch For:

Employment Report for September, earnings from Apogee Enterprises before the open

Today's Headlines/Must Reads:

- Biden Sidelined as Israel Reshapes Middle East

- Harris's Brother-in-Law Forges Business Ties-but Makes Left Nervous

- Is Europe's Biggest Battery Maker About to Run Out of Juice?

- Can a 'Precision Scheduling' Expert Fix Berkshire Hathaway's Railroad?

MARKET WRAPS

Forex:

The dollar fell as investors turned cautious ahead of the nonfarm payrolls.

"We expect a further deceleration in U.S. net-jobs creation from 142,000 in August, together with a modest pickup in the jobless rate to 4.3%," Unicredit Research said.

Another soft report, due at 1230 GMT, might take some shine off this week's dollar recovery whereas stronger-than-expected data could boost the currency after Powell recently damped bets for further aggressive rate cuts.

The euro faced further declines against the dollar even if payrolls data offers some brief respite by showing a higher unemployment rate, ING said.

"Ultimately, the less supportive rate differentials, risk sentiment instability and a turbulent EU budget season mean EUR/USD could stay under pressure."

If the euro breaks below the $1.1000 support level, the move could quickly extend to $1.0900.

On Monday Christine Lagarde boosted October interest rate-cut expectations while Jerome Powell damped aggressive rate-cut bets.

Sterling edged slightly higher after BOE chief economist Huw Pill signalled gradual interest-rate cuts.

Energy:

Oil prices were broadly stable in early trade after jumping 5% on growing fears that Israel would retaliate against Iran by targeting its oil facilities.

Both benchmarks surged in the previous trading session, boosted by President Biden's comments suggesting officials are considering whether to support an Israeli strike on Iranian oil facilities.

A strike on oil infrastructure would boost the risk premium priced into the market, given that Iran is the seventh largest oil producer in the world.

Still, further price gains are limited by concerns over global demand and prospects of a supply surplus after OPEC member Libya resumed production Thursday and as OPEC+ prepares to hike output in December.

Metals:

Gold futures rose close to records ahead of the key data.

Gold Chart

Gold might retest resistance at $2,700 and if a bullish breakout above this level occurs, Comex gold futures could extend gains toward $2,775, RHB Retail Research said, based on the daily chart.

Comex gold futures formed a "Doji" candlestick pattern with a "long lower shadow" on Thursday and recent positive price movements and rising relative strength index suggest bullish momentum gathering pace again, it said.

TODAY'S TOP HEADLINES

Nvidia Stock Rises. Its OpenAI News Is Driving Shares.

Nvidia stock picked up some gains on Thursday as investors digested the news that the chip maker has invested in ChatGPT developer OpenAI.

Shares in the chip maker climbed 3.4% to $122.85, compared with a 0.2% decrease for the benchmark S&P 500 index.

Robotaxis Can't Be a Solo Act

Robotaxis might not need drivers. But they still need passengers-lots of them.

That might seem to be stating the obvious. And yet, when Elon Musk announced in early April that Tesla was planning to unveil its own robotaxi, the first instinct of investors was to bail on a company that already had a platform of 150 million people using it at least once a month for rides and food delivery. Uber lost nearly one-quarter of its market value over the following four months.

Tesla Stock Is Down Again Today. This Time, It Isn't About Deliveries.

Tesla stock fell Thursday. Third-quarter delivery results weren't to blame. Product and employment decisions might be.

Shares of the electric vehicle maker opened down 1.8%. The stock clawed back the losses and briefly traded higher but slid later in the day. Shares ended down 3.4% at $240.67 while the S&P 500 and Dow Jones Industrial Average fell 0.2% and 0.4%, respectively.

Springer Nature Shares Jump in Stock Market Debut

Springer Nature shares rose as the company started trading on the Frankfurt Stock Exchange, implying a market valuation of 44.63 billion euros ($49.24 billion).

Shares of the publisher of the scientific journal Nature and Scientific American magazine were trading at 24.34 euros in early trading compared with its initial public offering price of 22.50 euros.

Tussle for Control of Korea Zinc Sends Shares Higher

A battle for control over Korea Zinc, the world's largest zinc smelter, heated up further, sending its shares higher Friday.

Shares of the Seoul-based nonferrous-metal producer closed 8.8% higher at 776,000 won, equivalent to $581.22, outperforming the benchmark Kospi's 0.3% gain.

EU to Move Ahead With New Tariffs on Chinese-Made EVs

The European Union will impose tariffs of up to 45% on electric cars made in China, defying pleas from some European auto executives who fear retaliation from Beijing and an escalating trade war.

EU member states voted to approve the new import fees for the next five years in a move aimed at protecting European carmakers from subsidized Chinese-made vehicles.

Asian Shipping Stocks Fall After U.S. Port Workers Suspend Strike

Shares of Asian shipping companies fell sharply Friday after U.S. port workers suspended a three-day strike, dashing hopes for higher freight rates as a result of limited supply.

In China, Cosco Shipping dropped 8.5% and Orient Overseas (International) slid 8.1%. Japan's Nippon Yusen fell 8.8% and Kawasaki Kisen Kaisha declined 9.4%. South Korean shipping companies HMM and Pan Ocean declined 4.8% and 5.4%, respectively, in morning trade.

U.S. Port Workers Agree to End Their Strike

U.S. dockworkers agreed to return to work after port operators sweetened their contract offer, ending a three-day strike that threatened to disrupt the American economy.

The breakthrough Thursday came after port employers offered a 62% increase in wages over six years, according to people familiar with the matter.

Heavy Israeli Airstrikes Target Likely Successor to Hezbollah Leader in Beirut

BEIRUT-Israel targeted Hezbollah's likely successor to slain leader Hassan Nasrallah with heavy airstrikes on Beirut's southern suburbs Friday, as it continues to try to dismantle the Lebanese militant group's leadership structure.

The attempt on Hashim Safieddine was the latest in a series of aggressive Israeli attacks on the group, including an intelligence operation that caused thousands of electronic devices carried by Hezbollah to explode at roughly the same time, an airstrike that killed most of the leadership of the group's elite Radwan force, and an air campaign that has hit more than 3,000 targets across Lebanon.

How Eric Adams Plans to Remain in Power

New York Gov. Kathy Hochul last week delivered a private message to Eric Adams, the first mayor of New York City to face a federal criminal indictment: Clean house and keep the city running.

The two Democrats are close, but it was more than friendly advice. Hochul has the constitutional power to remove Adams from office as he fends off bribery and fraud charges as well as calls to step down.

Write to clare.kinloch@wsj.com

TODAY IN CANADA

Earnings:

Nothing major scheduled.

Economic Indicators (ET):

1000 Sep Ivey Purchasing Managers Index

Stocks to Watch:

DRI Healthcare Trust Acquires Payment Streams Based On The Cas9 Gene-Editing Technology For CASGEVY(R) (exagamglogene Autotemcel)

Expected Major Events for Friday

02:00/JPN: Sep Imported Vehicle Sales

06:45/FRA: Aug Industrial production Index

08:00/ITA: 2Q General Government Quarterly Accounts

08:00/UK: Sep UK monthly car registrations figures

08:30/UK: Sep S&P Global UK Construction PMI

09:00/ITA: 2Q GDP revised

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October 04, 2024 06:27 ET (10:27 GMT)

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