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The U.S. is expected to have added fewer jobs in the last month of 2023 as the transitory effects from the auto and Hollywood strikes that boosted November's gains are now in the rearview mirror. Nonfarm payrolls, which the U.S. Labor Department is slated to publish at 8:30 AM ET, are seen cooling to 170K in December from the 199K estimate in the prior month. That would spell good news for the Federal Reserve, which is banking on softer conditions to pull off a "soft landing" scenario for the economy.

Watch the 4% levels: The unemployment rate, which has stayed low over the last two years, is expected to tick up to 3.8%, but remain below the 4% mark for the 23rd straight month. Similarly, on a Y/Y basis, average hourly earnings are expected to grow 3.9%, which would be the first time wage gains have come in under 4% since mid-2021. Any deceleration would be welcome news for the U.S. central bank, as it seeks to bring labor demand and supply back into balance in a bid to tame inflation.

Last month, the Fed made a dovish pivot, holding its benchmark lending rate steady for a third straight meeting and signaling its intentions to start cutting rates this year. However, if inflation continues to be stubborn and reaccelerates, then the Fed's rate projections could be subject to change and thus disappoint markets. Keep an eye on this morning's numbers, which can impact how investors size up Treasuries, as well as stocks that have cooled in the new year following an impressive nine-week winning streak.

SA commentary: "The labor market data is likely to confirm the disinflationary process, which will allow the Fed to start cutting interest rates, as expected," wrote SA analyst Damir Tokic. "The reaction of the bond market is likely to guide the reaction of the stock market, which is prone to a profit-taking dip after the end-of-the-year rally." Chris Lau, Investing Group Leader of DIY Value Investing, also feels that Friday's jobs report "is unlikely to offer any dramatic changes" to market participants' rate expectations.

Market cap battle
Concerns surrounding Apple (NASDAQ:AAPL) may soon lead to a new titleholder of the world's most valuable company. Microsoft (NASDAQ:MSFT) closed out the session on Thursday with a market cap of $2.73T, compared to the $2.83T of its tech rival, which has fallen in every session of the new year. While Apple has held the crown since Nov. 21, it was recently hit with a set of downgrades at Barclays and Piper Sandler over concerns about an iPhone slowdown, hardware trouble and macroeconomic pressures. On the other hand, Microsoft, which just added a Copilot AI button to its Windows keyboard, has been forecast to be one of the AI favorites in 2024 as mentioned in Wall Street Breakfast's special holiday edition. (11 comments)

Price protest
The grocery retailer may be largely unknown in the U.S., but it is one of the globe’s largest supermarket chains with more than 12K locations across more than 30 countries. Carrefour (OTCPK:CRRFY) is no longer selling PepsiCo (NASDAQ:PEP) products in France, Italy, Spain and Belgium as the retailer says "pas plus" to price hikes. Carrefour's protest against higher prices might be well placed as PepsiCo has raised prices for seven consecutive quarters by double digits and has even claimed to have shrunk packaging sizes to meet consumer demand for portion control. The maker of Lay's, Doritos, 7 Up, and Lipton tea saw revenue increase by 6.7% in the latest quarter and it is expected to have increased by 10% in 2023. (37 comments)

Masking returns
Hospitals across several states, including those in New York, California, Illinois, and Massachusetts, have reimposed masking requirements for patients and staff amid a spike in COVID and flu infections. The decision comes as the two respiratory viruses gain momentum in the U.S. According to the latest data from the CDC, COVID-related hospitalizations have risen more than 29K from Dec. 17-23, indicating a ~17% rise over the prior week, while flu cases have reached close to 15K over the same period. In NYC, all 11 public hospitals, 30 health centers, and five long-term care facilities have made masks mandatory, citing potential staffing issues as a reason. (132 comments)

Today's Economic Calendar

8:30 Non-farm payrolls
10:00 Factory Orders
10:00 ISM Services Index
1:00 PM Baker-Hughes Rig Count
1:30 PM Fed's Barkin Speech

Companies reporting earnings today »

What else is happening...

iPhone 17 (AAPL) said to get huge camera upgrade amid sales concerns.

Motivation That Moves You: Peloton (PTON) inks TikTok partnership.

Phillips 66 (PSX) in active talks for sale of non-core assets.

Mobileye (MBLY) guidance sends shivers down spine of chip industry.

No longer available: Bye, Kim. A Kardashian venture goes away.

Walgreens Boots Alliance (WBA) nearly halves its dividend payout.

Rejected: Apple (AAPL) and Disney's (DIS) requests to avoid AI votes.

Costco (COST) benefits from additional shopping day in December.

Impacting business, McDonald's (MCD) faces backlash in Middle East.

Ford (F) U.S. posts Q4 sales growth on record EV, hybrid volumes.

Shares under $1: Nikola (NKLA) produced 42 hydrogen-cell trucks in 2023.


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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