Friday Morning Reads, News, Options, and Charts
- New Safe Haven
- Japan Recalls Its Bubble Era
- Call Trump’s Bluff
- It’s Personal
- Next Wave of Pain
- Dimon’s Take
- Tesla’s Other Problem Is About to Emerge
- Contrarian Trend Follower?
- Don’t Let Big Tech Ruin You
- More trade bluster hits markets
- Netflix eyes L.A. billboard company
- Amazon mulls payments business
- March jobs report in the spotlight
- MGM said to have approached Wynn
- Facebook's Sandberg talks paid product
- German industrial production weakens
- Fed's Powell due to talk
- China: We'll fight new tariffs at any cost
Can we talk about something different than China and trade? The answer is yes, as the March Employment Situation report is due out from the Labor Department at 8:30 EST. The consensus forecast from economists is for nonfarm payrolls to be up 185K from February, with estimates ranging from 112K to 225K. Major winter storms might have affected some industries during the month. The labor participation rate is expected to drop to 62.8% from 63.0%, The unemployment rate is seen falling to 4.0% from 4.1%, which would match the lowest jobless rate since December 2000 and create some debate on how far the eight-year downtrend in the UE rate can extend. Investors will also be closely watching labor inflation. Hourly wages are anticipated to see a 0.3% month-over-month rise and 2.7% year-over-year gain, a slight acceleration from the pace seen in February, but not enough to create major waves in the bond markets.
Back to trade talk: President Trump has instructed the U.S. trade representative to look at $100B more in tariffs against China. "In light of China's unfair retaliation, I have instructed the USTR to consider whether $100B of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs," Trump said. European bourses are only slight lower off the new trade wildcard, with the Stoxx Europe 600 Index showing a 0.52% dip. U.K.'s FTSE -0.3%, Germany's DAX -0.7% and France's CAC -0.6% are all in negative territory. In Asia, Japan's Nikkei turned 0.4% lower, while South Korea's Kospi peeled off 0.3%. Stocks also retreated in Shanghai and Australia, while Hong Kong stocks played catch-up after being closed Thursday. U.S. stock futures are pointing to a lower opening. S&P 500 futures are down 0.74%, while Nasdaq 100 futures are 0.78% lower. U.S. stocks have a three-day winning streak in play.
Federal Reserve Chairman Jerome Powell will deliver a speech on the economic outlook at the Economic Club of Chicago at 1:30 PM EST (listen live). Powell said a few weeks ago that he only saw "moderate vulnerabilities" in asset prices compared to their long-term normal levels. A continuation of the optimistic stance by Powell on the economy could help to lock in market expectations for two more rate hikes this year.
Crude oil prices are slightly lower as they head toward their biggest weekly decline of over a month. Looking ahead, analysts expect tight global supply to keep a floor in place on the oil market. "Supply-side issues amid a backdrop of falling inventories should override any concern over weaker economic growth," observed ANZ Bank. OPEC and non-OPEC producers are still committed to cut output by 1.8M barrels per day this year. WTI crude oil future -0.27% to $63.37/bbl at last check. Brent crude -0.20% to $68.19/bbl.
German industrial production fell 1.6% in February to mark the largest monthly drop in the measure for two and a half years. Factories in Europe’s largest economy slowed down production amid global trade tensions. German industry recorded declines in capital goods, consumer goods, intermediate goods and construction during the month. "If the duties cut or hinder global value chains, this could also affect the sales opportunities of German companies in the medium term," noted a German commerce official on the development.
An interesting economic read arrives in the afternoon hours today when the Commerce Department reports on consumer credit. Economists expect a jump to $15.1B in February from $13.9B in January, when credit card usage was lower than anticipated. Did consumers return to a spending mood again?
The media blitz by Facebook Chief Operating Officer Sheryl Sandberg included an appearance on NBC in an interview set to air today. Sandberg said Facebook users would have to pay a fee (NASDAQ:FB) to avoid all user data-targeted advertisements. "We don't have an opt-out at the highest level... That would be a paid product," stated Sandberg. Shares of Facebook are down 1.17% premarket after jumping 2.73% yesterday.
Prosecutors have reportedly raided the offices of a repair unit at Samsung (OTC:SSNLF) seeking documents that may tie the company to union-busting. The probe emerged from a separate investigation into whether the company bribed South Korea's former president; a similar previous case against Samsung broke out amid troubles verifying a document at the center of the investigation.
Casino merger talk: MGM Resorts (NYSE:MGM) has made "back-channel" approaches to Wynn Resorts (NASDAQ:WYNN) about a takeover, according to the New York Post. While Wynn Resorts isn't on the block, sources indicate that the company would sell at the right price. The lack of any board additions at Wynn is seen as a signal that a deal could be brewing. Shares of Wynn are up 2.41% premarket to $185.60.
The unlimited spending by Netflix (NASDAQ:NFLX) is a long-term threat to the exhibitor sector, warns MoffettNathanson. Netflix has 80 titles scheduled to be released this year, adding to the pressure on Cinemark (NYSE:CNK), AMC Entertainment (NYSE:AMC), Reading International (NASDAQ:RDI) and Marcus Corporation (NYSE:MCS) to get moviegoers out of the house. The investment firm expects the U.S. box office to grow 1% this year as higher ticket prices offset a drop in traffic.
An extended sales slump has pushed Campbell Soup (NYSE:CPB) to make some moves. Industry veteran Luca Mignini was named the company's new COO, putting him in line for the top job at the struggling company. Mignini joined CPB in 2013 and heads the snacks unit, which makes Pepperidge Farm cookies and Goldfish crackers and has become a key focus to drive growth amid declining sales of canned soup. Campbell also says it is restructuring the company, including the creation of an "accelerator unit" to focus on areas such as e-commerce and faster-growing segments of the market.
After noting early last month that it would delay financial statements, WageWorks (NYSE:WAGE) said it would restate a number of them going back to the quarter ended June 30, 2016. The company also instituted a heavy reshuffling of its executive suite: Edgar Montes becomes the new CEO, while Joe Jackson moves to become executive chairman; and CFO Colm Callan and General Counsel Kim Wilford have resigned their positions.
Proxy advisory firms ISS and Glass Lewis recommended that General Electric (NYSE:GE) fire KPMG as its auditor after 109 years because of accounting issues at the company. Despite the unusual rebuke, KPMG is unlikely to lose the GE account, the Wall Street Journal reports, as investors rarely reject an outside auditor recommended by a corporate board. Shares of GE are down 1.34% in premarket trading.
Trademark bonanza: SoftBank Group (OTCPK:SFTBY, OTCPK:SFTBF) has said it expects to book the ¥350B ($3.2B) in brand usage fees churned up by its mobile subsidiary as extraordinary profit for the fiscal year that just ended.
In Asia, Japan -0.36%. Hong Kong +1.11%. China closed. India +0.05%.
In Europe, at midday, London -0.13%. Paris -0.53%. Frankfurt -0.54%.
Futures at 6:20, Dow -0.79%. S&P -0.73%. Nasdaq -0.82%. Crude -0.33%to $63.33. Gold +0.04% to $1,329. Bitcoin -3.81% to $6,576.
Ten-year Treasury Yield -1.3 bps to 2.819%
Today's Economic Calendar
8:30 Non-farm payrolls
1:00 PM Baker-Hughes Rig Count
1:30 PM Jerome Powell: U.S. Economic Outlook
3:00 PM Consumer Credit
4:00 PM Fed's Williams: Economic Outlook
10:30 on Saturday Fed's Evans: Monetary Policy