US stock futures declined on Friday as investors increased their wagers that the Federal Reserve will continue to cut interest rates to stave off a recession; raising the stakes of Friday’s hiring data following a volatile week on Wall Street.
Economists surveyed by FactSet expect the US to have added 145,000 jobs last month vs. 130,000 in August. The unemployment rate is expected to remain steady at 3.7%.
Today’s job creation reading will follow this week’s grim assessment of both the US manufacturing and service sectors, caused by slowing global commerce, which has strengthened the market's expectation of monetary policy intervention.
Anticipation of a sharper-than-feared growth slowdown is pushing investors to bet that the Fed will continue to lower borrowing costs, despite recent rate cuts in July and September.
The CME FedWatch tool has priced in an 87.1% chance of a rate cut this month, which would lower the target rate range to 1.5% - 1.75%.
These shifting interest rate expectations have swung markets for months, including on Thursday, when stocks erased an early selloff as investors seemingly shook off weak services data to close higher.
The S&P 500 advanced +0.82%, having been down as much as -1.10% earlier in the session. The Nasdaq Composite recorded a similar shift, having gained +1.10% into the closing bell.
Ahead, in today’s economic calendar, Friday includes; the Official US Jobs Report for September and International Trade data for August both at 8:30am EST.
Meanwhile, Federal Reserve Chairman, Jerome Powell, is scheduled to give opening remarks at the "Fed Listens: Perspectives on Maximum Employment and Price Stability" event in Washington at 2:00pm EST.
TODAY'S TOP HEADLINES
Hong Kong: Protesters Vow to Defy Government’s Mask Ban. (Bloomberg)
Protesters called for a mass show of defiance against Hong Kong’s newly imposed mask ban, including march in Halloween masks, as the government invoked rarely used powers to quell the unrest.
Today's Economical Announcements.
08:30AM - ★★☆ - Trade Balance (Aug) (Previous: -54.0B)
08:30AM - ★★★ - Nonfarm Payrolls (Sep) (Previous: 130,000)
08:30AM - ★★★ - Unemployment Rate (Sep) (Previous: 3.7%)
02:00PM - ★★★ - Fed Chair Powell Speaks
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
HP Inc. (HPQ): [NEWS] Will cut up to 16% of its workforce, or up to 9,000 workers. The computer and printer maker will accomplish those reductions through a combination of employee departures and voluntary early retirement, with annual cost savings of about $1 billion by the end of fiscal 2022.
Costco (COST): [EARNINGS] Reported adjusted quarterly profit of $2.69 per share, beating the consensus estimate of $2.54 a share. Revenue and comparable-store sales came in below estimates, however, as the warehouse retailer joined rivals in cutting prices to defend market share.
Apple (AAPL): [NEWS] Is increasing the production of its iPhone 11 models by about 10%, approximately 8 million units, according to Japan’s Nikkei news service. Sources say a recent jump in iPhone orders is focused on the least expensive of the new models.
Snap (SNAP): [UPGRADE] Upgraded to “equal-weight” from “underweight” at Morgan Stanley. The firm points to faster ad revenue growth and improved discipline in managing operating expenses.
Altria (MO): [NEWS] Hedge fund Darsana Capital wrote down its investment in the e-cigarette maker Juul Labs by more than a third, according to people familiar with the matter who spoke to The Wall Street Journal.
Five Below (FIVE): [RATING] Rated “outperform” in new coverage at William Blair, which thinks the discount retailer offers a “fun, differentiated” shopping experience for kids, teens, and their parents.
Etsy (ETSY): [RATING] Rated “buy” in new coverage at Nomura Instinet, which praises the online crafts marketplace operator’s execution and pricing strategy.
Domino’s Pizza (PZZA): [RATING] Wedbush initiated coverage of the pizza chain’s stock with an “outperform” rating, noting a compelling financial model and saying market sentiment toward Domino’s is overly negative.
DuPont (DD): [RATING] Rated “overweight” in new coverage at Melius Research, which thinks the stock is close to a bottom with various negative factors priced in. It also points to a number of upside catalysts in terms of both costs and its product portfolio.
GAINERS: OKTA, TAL, LW
DECLINERS: STZ, TERP, SCHW
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