OPENING CALL
It's Jobs Day
May's readout, due at 8:30 a.m. ET, is expected to show signs of a modest labor market pick-up. A strong showing, which could suggest more spending power for consumers, could delay expectations for when the Federal Reserve will begin cutting interest rates. The Fed's next rate decision is due Wednesday.
We will also hear from "Roaring Kitty" on Friday. Keith Gill has scheduled a YouTube livestream for noon ET. GameStop shares, which closed almost 50% higher Thursday, rallied further in premarket trading.
In other recent trading:
Stock futures were little changed, while Treasury yields crept higher after dropping for six consecutive days, in their longest stretch of declines since April 2023.
Nvidia is in focus ahead of its stock split that will take place after the market closes.
Premarket Movers
Braze raised its full-year revenue outlook on higher sales last quarter. Its shares rallied 14%.
DocuSign failed to impress investors with its first-quarter results. Shares fell over 6%.
Vail Resorts cut its full-year profit guidance, after warm weather continued to hit visits to some resorts. Shares dropped 6%.
Postmarket Movers
Mission Produce said revenue rose 35% in the fiscal second quarter with increases in selling prices and volumes. The company swung to a profit and reported strong consumer demand for its avocados. Shares rose 7.5%.
Other Stocks to Watch
Moody's has placed the long-term debt ratings of Old National Bancorp and several other U.S. regional banks on review for downgrade amid concerns over commercial real-estate exposure.
Watch For:
Employment Report for May; Canada Labour Force Survey for May; Alphabet AGM webcast
Today's Headlines/Must Reads:
- Halfway Through an Epic Election Year, the Winner Is: Surprise
- Japan Defends Its Turf in the Global Chip Battle
- The Hidden Life of Google's Secret Weapon
- What CEO Succession Could Mean for Blackstone, BlackRock, and JPMorgan
MARKET WRAPS
Forex:
The European Central Bank's data-dependency guidance will certainly increase the sensitivity of bond and currency moves around key data releases, MUFG said, as investors await the payrolls data for May.
MUFG has a bias towards a stronger euro against the dollar. The euro edged higher against the dollar following the ECB's well-anticipated 25 basis point interest-rate cut but whether it could test the $1.1000 level will very much depend on the jobs report, MUFG said.
UniCredit Research said the data could potentially affect the likely timing of an interest-rate cut by the Fed, and will be key for the dollar.
UniCredit expects a steady net jobs creation figure of 180,000 and a steady unemployment rate of 3.9%, which would probably leave the dollar little changed against the euro. More solid jobs creation of at least 200,000 would be needed to drive the euro lower, although it should stay above $1.08, UniCredit added.
Bonds:
Terminal rate expectations matter for 10-year German Bunds more than what the ECB does from one meeting to the other, Societe Generale Research said.
The ECB's widely expected 25 basis point interest-rate cut on Thursday wasn't enough to drive Bund yields lower, as eurozone yields edged higher.
"Shifts in policy rate expectations for the subsequent two years or so explain the bulk of moves in long-maturity rates."
Citi Research said holding long positions in eurozone peripheral government bonds looks an attractive way to bet on rising eurozone bond prices and falling yields during the summer.
Citi continues to expect eurozone government bond yield spreads over German Bunds to tigthen further, and particularly favors Italian bonds, or BTPs.
"Periphery spreads have displayed patience during the year-to-date pricing out of ECB rate cut expectations for 2024," Citi said, adding that reduced rate-cut optimism has been offset by broader strength in risky assets.
Energy:
Oil prices were broadly stable but still on track for weekly losses after a selloff sparked by OPEC+'s decision to gradually bring some barrels back into the market later this year.
Metals:
Gold futures continued to trade in a tight range ahead of the nonfarm payrolls, with investors hoping the data will comes in weaker than expected, supporting the case the Fed will be able to start easing monetary policy sooner rather than later.
TODAY'S TOP HEADLINES
Netflix Shareholders Vote to Recommend Refreshed Executive-Pay Plan
Netflix shareholders voted to recommend approval of a refreshed executive-pay plan a year after the company's previous proposal was rejected.
The streaming company said Thursday that shareholders had voted for advisory approval of the new plan, which gives both chief executives total target pay of up to $40 million each. The outcome of the vote is nonbinding.
Drone Delivery's Next Challenge Is How to Clear Cost Hurdles
Drone operators have figured out how to defy gravity to deliver items from diapers to prescription medicines by air. Making a profit is proving more challenging.
Companies from Walmart and Amazon to delivery app DoorDash have started aerial deliveries in parts of the U.S., as they look to speed up fulfillment while reducing carbon emissions.
Its Risk-On in the Market. Traders Count on a 'Fed Put.'
Imaging you had your own personal bodyguard ready to step in if anybody threatened you. How much bolder would you be?
That's the mind-set of traders in the current bull market. There's an expectation that the Federal Reserve, the world's biggest central bank in assets, will step in to provide support when the economy needs it.
A Texas Stock Exchange Wants to Take on New York. The Odds Aren't Good.
The Texas Stock Exchange is looking to steal New York's crown as the center of U.S. capital markets. It has a powerful force behind it: red-state frustration with the perceived liberal agenda of Wall Street.
But that might not be enough to win business from the New York Stock Exchange and Nasdaq, which enjoy an effective duopoly on corporate listings and have withstood repeated attempts by others to break in.
Gold Prices Are Sky-High. Will Gold Miners Follow?
Gold miners aren't shining in the same way as the precious metal they dig up. Could predictions of an eye-watering rally in prices ahead change that?
While gold prices are already 20% higher than a year ago, after a record-breaking rally, a benchmark gold-mining index is up by just half that.
China's Exports Picked Up Pace in May
China's exports grew at a faster rate in May, thanks to resilient global demand, while import growth slowed.
Outbound shipments rose 7.6% from a year earlier in May, up from the 1.5% increase in April, the General Administration of Customs said Friday. The result topped the 4.8% growth expected by economists in a survey by The Wall Street Journal.
India Central Bank Keeps Rate Unchanged After Election Raises Fiscal Policy Uncertainty
India's central bank held its policy rate steady as Prime Minister Narendra Modi's election setback raised uncertainty over the country's future economic and fiscal policies.
Reserve Bank of India Gov. Shaktikanta Das said Friday that the monetary-policy committee decided to maintain its policy repo rate at 6.50%. The committee also decided to remain focused on withdrawal of accommodation, he said.
At End of Trump Tax Cuts, Progressives See Leverage to Target the Rich
WASHINGTON-Huge pieces of Republicans' 2017 tax law are scheduled to lapse after next year, and Democrats see that deadline as a rare chance to reset fiscal policy and raise taxes on corporations and high-income households.
Policymakers and analysts expect a yearlong fight and Christmas-season negotiations to prevent tax increases from hitting most Americans after Dec. 31, 2025, when the law's cuts end. Lawmakers are starting to think through what leverage they have-and how and when to use it.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
None Scheduled
Economic Calendar [ET]:
0830 May Labour Force Survey
0830 1Q Industrial Capacity Utilization Rates
Stocks to Watch:
Saputo 4Q Rev C$4.55B; Net C$92M; Saputo Have Now Completed the Bulk of the Major Cap Projects Under Our Global Strategic Plan; Ramping Up Comml Production at Several of Our Facilities; FY25 Inflationary Pressures Are Anticipated to Moderate Versus the Prior Yr
Xtract One Technologies 3Q Rev C$4.68M; 3Q Loss/Shr C$0.01
Expected Major Events for Friday
05:00/JPN: Apr Indexes of Business Conditions - Preliminary Release
06:00/GER: Apr Foreign Trade
06:00/UK: May Halifax House Price Index
06:00/GER: Apr Industrial Production Index
06:45/FRA: Apr Foreign trade
06:45/FRA: Apr Balance of payments
08:30/UK: 1Q Bank of England external business statistics
12:30/US: May U.S. Employment Report
12:30/CAN: May Labour Force Survey
12:30/CAN: 1Q Industrial capacity utilization rates
14:00/US: Apr Monthly Wholesale Trade
19:00/US: Apr Consumer Credit
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
Ampio Pharmaceuticals Inc (AMPE) is expected to report for 1Q.
Avalon GloboCare Corp (ALBT) is expected to report for 1Q.
Environmental Tectonics Corp (ETCC) is expected to report for 4Q.
Excellon Resources Inc (EXN.T) is expected to report for 1Q.
Graham Corp (GHM) is expected to report $0.04 for 4Q.
Hurco Cos (HURC) is expected to report for 2Q.
J.Jill (JILL) is expected to report $1.20 for 1Q.
MGT Capital Investments Inc (MGTI) is expected to report for 1Q.
Tel Instrument Electronics Corp (TIKK) is expected to report for 4Q.
Uranium Energy Corp (UEC) is expected to report for 3Q.
Wins Finance Holdings Inc (WINSF) is expected to report for Interim.
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ANALYST RATINGS ACTIONS
American Electric Power Raised to Neutral From Sell by Ladenburg Thalmann
(MORE TO FOLLOW) Dow Jones Newswires
06-07-24 0613ET
