MARKET WRAPS
Watch For:
Employment Report for August
Opening Call:
Stock futures wobbled on Friday, with the major indexes looking vulnerable ahed of jobs report for August.
The jobs data likely will be a key catalyst for market sentiment after investors largely got a breather on Thursday following days of losses.
Dominating the market narrative have been worries over red-hot inflation and the Federal Reserve's response to it.
"The U.S. jobs report could also be a negative catalyst later in the session if it's deemed strong enough to warrant more aggressive tightening from the Fed," said Craig Erlam, an analyst at broker OANDA.
"We've seen a lot more risk aversion in the markets recently as Fed commentary has finally gotten through to investors."
Overseas, the pan-European Stoxx 600 gained 0.8%, while Hong Kong's Hang Seng Index tumbled 0.7% in a hangover of downbeat sentiment after a new lockdown in China was announced on Thursday.
Stocks to Watch:
Semiconductor stocks were rising cautiously after chip maker Broadcom said it expected "solid demand" to continue in its fiscal fourth quarter. Chief Executive Hock Tan told analysts that "infrastructure spending is still very much holding."
Broadcom shares rose 2.2% in premarket trading Friday to $502.90 after the company said it expected fourth-quarter revenue of $8.9 billion, higher than analysts' expectations of $8.77 billion.
Read more here.
Forex:
The dollar was slightly lower in early European trading but could rise if nonfarm payrolls are stronger than expected, Swissquote Bank said.
Activity on Fed funds futures gives around 75% chance for a 75 basis points interest rate hike at the Fed's September 20-21 meeting. "We could see this probability spike higher in case of strong NFP data--which would mean higher yields, a further advance in the dollar, and some more negative pressure on stock valuations," Swissquote said.
If the data meet expectations or are softer-than-forecast, the dollar could fall along with yields and equities could rise.
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The euro recovered some ground after news that Russia should resume gas flows through the Nord Stream pipeline to Europe at 20% capacity on Saturday, but the currency's gains are modest and may not last, ING said.
It's a "quite limited positive reaction by the euro, which likely denotes how markets remain very cautious to price out the risks of a complete cutoff in gas supplies in the coming months," ING said.
With the potential for another round of dollar appreciation on the jobs report, EUR/USD could retest the 0.9900 level before markets close for the weekend, ING added.
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Fed's Aggressive Stance Pushes Yen to 24-Year Low Against Dollar
Bonds:
Bond yields could exceed June levels, which were previously seen as their peak, AXA Investment Managers said, which sees both the Fed and the ECB likely raising rates by 75 basis points in September.
Energy:
Oil prices rose more than 2% following days of losses, as traders awaited next week's OPEC+ meeting, with an output cut likely to be discussed after ministers from a number of member nations, including Saudi Arabia, raised that possibility.
Still, the group may choose to wait until a later meeting before taking the step, ING said.
"We expect the group to leave output targets unchanged. Their own numbers show a lighter-than-expected market. And they would probably also want some more clarity on Iranian supply before making any big changes to output policy," ING added.
Metals:
Metals markets were wavering in early European trading, with the focus on the payrolls data, as investors look for signals on which way the economy is trending.
Copper and gold futures were around 0.3% higher, while zinc dropped 1.2%.
"Markets are pretty complicated at the moment with investors not being quite able to decide whether the newsflow was bad or good yesterday for risk assets," Deutsche Bank Research said.
TODAY'S TOP HEADLINES
Shell, Exxon Mobil Sell California Oil and Gas Producer to German Asset Manager
Exxon Mobil Corp. and Shell PLC are selling their stakes in one of California's largest oil and gas producers to German asset manager IKAV Capital Partners GmbH.
Aera Energy LLC, a joint venture of the oil giants, accounts for nearly a quarter of the state's production, according to its website.
Labor Official Recommends Amazon Union Victory in New York Be Upheld
A federal labor official has concluded that the union victory by labor organizers at an Amazon.com Inc. facility in New York should be upheld, after the company contested the April results in which workers voted to establish a union.
Lisa Dunn, a hearing officer with the National Labor Relations Board, said Amazon hadn't adequately proved that the results were inappropriately influenced, a spokeswoman with the NLRB said Thursday. Amazon had contested, saying that the NLRB region where the election was held, as well union organizers, had inappropriately swayed the vote.
Chinese Electric Vehicle Stocks Slide Following August Delivery Reports
Shares of Chinese electric vehicle stocks declined in early Friday trade after the auto companies released their August delivery reports.
The Hong Kong-listed shares of NIO Inc. and XPeng Inc. fell 2.8% and 3.0%, respectively, with Xpeng touching HK$67.15, its lowest level since it listed in Hong Kong. Meanwhile, NIO's Singapore-listed shares slid 1.9%.
China Vanke's Property-Management Arm Onewo Readies Hong Kong IPO
Chinese property manager Onewo Inc., which is majority-owned by China Vanke Co., is preparing to launch an initial public offering in Hong Kong, despite continued turmoil in the real-estate sector and tepid investor sentiment.
The company hasn't yet disclosed how much it intends to raise from the IPO but a filing on Thursday showed it has cleared its listing hearing with the Hong Kong stock exchange, meaning it can now start marketing the offering.
From Cleaners to Coffee, the Executive Taking Over Starbucks
LONDON-Incoming Starbucks Corp. boss Laxman Narasimhan is returning to the U.S. after a three-year stint in Britain leading one of the world's best-known consumer-product companies, Lysol maker Reckitt Benckiser Group PLC.
When Mr. Narasimhan took over the Slough, England-based company in 2019, it was suffering from high turnover among senior executives, volatile sales growth and narrowing margins. Reckitt had also grappled with a cyberattack, failed innovations and manufacturing disruptions while once strong sales at its consumer health arm were slowing.
Illumina Wins Case Against FTC on Grail Acquisition
An administrative law judge has ruled in favor of Illumina Inc. in its $7.1 billion acquisition of cancer-testing developer Grail Inc., dealing a defeat to the Federal Trade Commission's efforts to unwind the deal on antitrust grounds, the company said.
Illumina said the judge rejected the FTC's position that the deal would hurt competition in the market for multicancer early-detection tests.
Fed's Aggressive Stance Pushes Yen to 24-Year Low Against Dollar
Markets paid close attention to a meeting of central bankers and economists in Jackson Hole, Wyo., last week for one reason-because Jerome Powell was speaking. The Federal Reserve chairman's hawkish comments led to a sharp selloff in stocks and a rise in Treasury yields.
But another, less-noticed speaker in Jackson Hole is equally responsible for one of the meeting's consequences, the fall of the yen this week to a 24-year low of more than 140 yen to the dollar. Haruhiko Kuroda, governor of the Bank of Japan, stood up from the audience during a panel discussion to share a few words about his own policy direction-one diametrically opposed to the Fed's.
Germany Trade Surplus Narrowed in July on Declining Exports
Germany's trade surplus narrowed in July as exports fell at a greater pace than imports.
Germany's trade surplus--the balance of exports and imports of goods--was euros ($5.37 billion) in calendar and seasonally-adjusted terms in July, narrowing from a EUR6.2 billion surplus in June, according to data from German statistics office Destatis released Friday.
Biden Says Trump and Allies Threaten America's Democracy
PHILADELPHIA-President Biden warned that former President Donald Trump and his allies are threatening to undermine the nation's democracy, using a prime-time address to lay out his concerns for the country's future when millions of Americans have questioned the legitimacy of the 2020 presidential election.
Standing in front of Philadelphia's Independence Hall, Mr. Biden directly condemned what he called "MAGA Republicans," citing the Jan. 6, 2021, riot at the U.S. Capitol by Trump supporters, saying, "As I stand here tonight, equality and democracy are under assault."
Jan. 6 Panel Seeks Information From Former House Speaker Newt Gingrich
The select committee investigating the Jan. 6, 2021, storming of the Capitol requested information from former House Speaker Newt Gingrich about his contacts with senior advisers to former President Trump in the days leading up to the attack.
The committee said in a letter to Mr. Gingrich that it is seeking information about television advertisements that spread false claims of voter fraud during the 2020 election. It said Mr. Gingrich, the Georgia Republican who led the House as speaker from 1995 to 1999, was also involved in other efforts to overturn the election, which was won by Democrat Joe Biden.
Argentina Vice President Cristina Kirchner Is Unharmed After Assassination Attempt
A man pointed a gun at the head of Argentine Vice President Cristina Kirchner at close range Thursday night and appeared to pull the trigger, video of the incident replayed on Argentine television showed.
(MORE TO FOLLOW) Dow Jones Newswires
09-02-22 0523ET
