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Expectations are high for the underlying pace of job growth to have continued decelerating in November with one caveat - workers returning after the auto and Hollywood strikes will boost the headline number. Economists see the U.S. economy adding 180K jobs last month, up from the 150K estimated for October, while the unemployment rate is expected to remain at 3.9%. "It looks like it's going to be more of the same," Olu Sonola, head of U.S. regional economics at Fitch Ratings, told Seeking Alpha, before the employment situation report is released by the Labor Department at 8:30 AM ET.

Snapshot: "More of the same" is exactly what the market wants right now, with softening inflation data and employment over the past month convincing investors that the Fed is done raising interest rates. In fact, rate-cut talk for 2024 is now all the rage within analyst circles, helping stocks record a bumper performance in November. Treasury yields, which previously touched highs of 5%, have also fallen sharply, with the 10-year benchmark sliding more than three-quarters of a percentage point in a little over a month.

As a result, today's jobs report will help determine whether the recent rally has been justified or if traders have gotten farther ahead of the central bank. The non-farm payrolls number is important because it's one of the Federal Reserve's two main jobs in managing the economy: maintaining full employment and price stability. This morning's numbers will also come during the Fed's quiet period ahead of next week’s policy meeting, where the probability the central bank will hold its policy rate at 5.25%-5.50% currently stands at 97.7%, according to the CME's FedWatch Tool.

What else to watch: Pay attention to the average hourly earnings figure today to assess the risk of an inflation rebound. Average hourly earnings are estimated to rise by 0.3% M/M in November, up from 0.2% in the previous month. On a Y/Y basis, though, AHE is seen rising 4.0%, easing from 4.1% in October. There will also be a fresh Consumer Price Index report to digest next week, which is set to influence the Fed's summary of economic projections and upcoming path of interest rates.

Yen rally

Japanese markets continued to decline on Friday for the third session in a row, while the yen rose as much as 1.1%, after briefly jumping 4% on Thursday. Market participants continue to bet on the Bank of Japan exiting its negative interest rate policy this month, with the yen (JPY:USD) set for its biggest weekly gain against the dollar since July. "Dramatic moves in the yen were underpinned by hawkish bets on BOJ, with the closing window of opportunity creating urgency," noted Charu Chanana, market strategist at Saxo. The yen still pared its advance after the latest GDP data showed Japan's economy shrinking more than expected, which may complicate the BOJ's outlook.

Patent seizures

A new framework by the Biden administration hopes to crack down on price gouging by Big Pharma via a proposal that would allow federal agencies to seize patents of drugs developed with taxpayer funds if they're too costly. Note that the U.S. previously refused to use its march-in authority to force Pfizer (PFE) and Astellas Pharma (OTCPK:ALPMF) to make their prostate cancer drug cheaper. "We'd be prepared to use existing laws to allow competitors to make and sell these drugs for less," President Biden declared. Others, like Senator Bill Cassidy (R-LA), countered that "this kind of short-sighted decision would kill American healthcare innovation." (47 comments)

India expansion

As Apple (AAPL) continues to diversify its manufacturing dependence away from China, it is now targeting to produce 50M-60M iPhones in India annually over the next 2-3 years. At those levels, 25% of all iPhones worldwide would be made in India. Apple already picked India as its site for manufacturing lower-end iPhones to be sold in 2025, while its top supplier Foxconn (OTCPK:FXCOF) has multiple projects in the pipeline. The company is even aiming to increase production in the country to about $40B over the next 4-5 years, though SA analyst Christopher Robb previously said shifting production to India "will take years to be meaningful." (7 comments)

Today's Markets

In Asia, Japan -1.7%. Hong Kong -0.1%. China +0.1%. India +0.4%.
In Europe, at midday, London +0.2%. Paris +0.7%. Frankfurt +0.1%.
Futures at 7:00, Dow -0.1%. S&P -0.1%. Nasdaq -0.2%. Crude +1.8% to $70.56. Gold flat at $2,046.90. Bitcoin +1.1% to $43,623.
Ten-year Treasury Yield +5 bps to 4.18%.

Today's Economic Calendar

8:30 Non-farm payrolls
10:00 Consumer Sentiment
1:00 PM Baker Hughes Rig Count

Companies reporting earnings today »

What else is happening...

Analysts weigh in on Google's (GOOGGemini, AMD's (AMDAI event.

Canada to impose oil and gas emissions cap to reach net-zero goal.

Yellow (OTC:YELLQ) declines offer to revive bankrupt company.

Amazon (AMZN) to drop Venmo; tests unlimited grocery service.

Broadcom (AVGO) slips despite strong 2024 guidance, Q4 results.

Chevron faces new Venezuelan risk as Maduro threatens Guyana.

Boeing (BA) on verge of 80 Dreamliner order from Thai Airways.

Levi Strauss (LEVI) top boss to retire, Kohl's ex-CEO to take over.

Lululemon (LULU) falls after investors digest holiday-quarter outlook.

$52B: Australian energy giants Woodside (WDS), Santos in merger talks.


Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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