OPENING CALL
Stock futures were little changed and bond yields rose Thursday as investors bet that labor market data in coming sessions will show the world's biggest economy remains in fine fettle.
The weekly initial jobless claims report, due 8:30 a.m. Eastern, is expected to show those signing on for unemployment benefit was just 215,000.
Then at the same time on Friday, the nonfarm payrolls report is forecast to show the economy produced a net 214,000 jobs in November.
Such outcomes will chime with comments from Jerome Powell, who on Wednesday said the economy is in very good shape and that officials can afford to be a little more cautious about bringing interest rates down to a more neutral level.
BNP Paribas said its "forecasts imply a November jobs report that is just ambiguous enough--strong job growth but a slight rise in unemployment, alongside moderate gains in pay--to keep a December rate cut as our base case."
Meanwhile, Crypto-linked stocks MicroStrategy, Coinbase and Robinhood rose as Bitcoin surpassed $100,000 for the first time followingTrump's pick to run the SEC.
Premarket Movers
AeroVironment reported adjusted earnings that missed analysts' estimates and issued weaker-than-expected fiscal-year guidance. Shares fell 7.1%
American Eagle Outfitters trimmed its sales outlook for the year on expectations for a larger-than-expected drop in sales for the holiday quarter. Shares fell 15%.
ChargePoint Holdings was up 8.2%. The company narrowed its loss and subscription revenue rose 19%.
Five Below tapped Forever 21's top executive to be its next CEO as it reported a 15% jump in sales, and raised its guidance. Shares rose 13%.
nCino stock tumbled after revenue guidance missed analysts' expectations.
PVH reduced its earnings outlook for the fiscal year to between, after posting lower earnings and revenue. The stock declined 6.3%.
SentinelOne fell 15% after posting a loss that was wider than a year earlier because of higher operating expenses.
Synopsys fell 7.3% after the semiconductor-design software provider issued fiscal first-quarter guidance that missed analysts' estimates.
Verint Systems rose 26% after earnings topped Wall Street estimates.
Postmarket Movers
Greif posted lower-than-expected earnings and guided for a downbeat fiscal 2025. Shares fell 7%
Watch For:
International Trade in Goods & Services for October; Weekly Jobless Claims; Canada International Merchandise Trade for October; earnings from Bank of Montreal, Toronto-Dominion Bank, Hewlett Packard, Kroger, Lululemon, Veeva Systems, Samsara, Dollar General and DocuSign.
Today's Headlines/Must Reads:
- He Was Going to Save Intel. He Destroyed $150 Billion of Value Instead
- How Trump Is Rethinking Economic Power
- How Tariffs Threaten an American Manufacturer's Big Investment in Mexico
- For Small-Cap Stocks, Look Past the 'Trump Trade'
MARKET WRAPS
Forex:
The dollar fell as investors continued to bet on the Federal Reserve delivering a 25 basis-point interest-rate cut at its December meeting after weaker-than-expected U.S. data, Swissquote Bank said.
The euro rose, and the scaling back of European Central Bank rate cut expectations and resilience to the French uncertainty has strengthened support for the currency near $1.05 and should allow a further rebound, Swissquote Bank said separately.
Christine Lagarde said Wednesday the battle against inflation wasn't over.
Given an uncertain outlook, the most cautious option for the ECB is a 25 basis-point interest-rate cut this month rather than a 50 basis-point reduction, Swissquote Bank said.
ING said the euro's current resilience to the news from France could prove short-lived as the country faces weaker economic growth, ING said.
While some might see it as positive that any fiscal tightening will be delayed, weak business investment means France could only grow by 0.6% next year, it said, and Germany is likely to contract by 0.2% next year.
"We see the European Central Bank cutting [the deposit facility rate] to 1.75% next year [from 3.25% currently]."
This should keep short-dated euro-dollar rate spreads in favor of the dollar in 2025, bringing the euro close to parity versus the dollar.
Bitcoin flows were dominated by institutional investors this year and this should continue with the cryptocurrency potentially hitting $200,000 by end-2025 after topping $100,000 overnight, Standard Chartered said.
Institutions bought 683,000 bitcoins year-to-date via U.S. spot exchange traded funds and large purchases by software group MicroStrategy with 245,000 of these inflows occurring after the U.S. presidential election.
"In 2025, we expect institutional flows to continue at or above the 2024 pace."
Pension funds make up a small proportion of ETF bitcoin holdings but should increase in 2025 due to expected regulatory changes.
Energy:
Oil prices were broadly stable as traders awaited OPEC+'s output policy meeting later and continued to monitor geopolitical risks in the Middle East.
Swissquote Bank said OPEC and its allies need to keep voluntary output cuts in place for more than three months to bolster market confidence. But even then, ample supplies and weaker demand will likely keep prices from rising substantially.
Metals:
Gold edged lower as traders maintained a cautious stance ahead of U.S. nonfarm payrolls data due on Friday for more insights into the Fed's next policy move.
Meanwhile, political turmoil in France and South Korea was supporting safe-haven demand.
Gold Chart
Comex gold futures were poised to resume their uptrend, based on the daily chart, says RHB said.
China Lithium
China's lithium oversupply is likely to persist, Daiwa Capital Markets said, forecasting a 12%-28% increase in lithium supply worldwide over 2025-26.
TODAY'S TOP HEADLINES
MicroStrategy Stock Soars. Here's How Much Its Bet on Crypto Bitcoin Is Now Worth.
Technically, MicroStrategy is a software company. In practice, it derives most of its value from its holdings of Bitcoin, which just topped $100,000 for the first time.
MicroStrategy shares added 6.3% in premarket trading to $431.55. As of Tuesday, it held 402,100 Bitcoin, according to a filing. That holding is now worth just more than $41 billion, or about half of the company's market capitalization. The stock has risen more than 500% since the start of the year, putting MicroStrategy on watch for being a bubble at one research house.
Lululemon's Stock Has Rebounded. What to Expect From Earnings.
Lululemon Athletica's stock has rebounded from its summer lows. Will the company's third-quarter results be enough to keep the rally going?
Analysts polled by FactSet expect the company to post earnings of $2.71 a share after the market close Thursday. Total sales are projected to jump by about 7% to $2.36 billion.
Just like Cyber Monday deals are getting extended, stock market rally will continue, Goldman strategist says
U.S. stocks are on track to continue hitting all-time highs in the final few trading sessions of 2024 on the back of record inflows into index funds, a new wave of corporate buybacks and a pick up in retail trading activity, Goldman Sachs' top technical analyst has said.
"Cyber Monday deals keep getting extended and the U.S. equity market rally is no different," Scott Rubner said, as he noted the S&P 500 index on Wednesday hit an all time high for the 56th time this year having traded higher for 10 of the last 11 sessions.
Trump Is Expected to Slash Banking Regulations Except in This Key Area
Bankers "dancing in the streets." Stock markets at records. The mood on Wall Street since the U.S. elections has been upbeat for an industry that likes to cast itself as cautiously optimistic.
The celebration comes as investors bet that President-elect Donald Trump's regulators will go softer on the industry than they do today, abandoning Biden-era pushes and giving firms more room to boost growth. One set of laws that industry insiders expect to generally remain a priority for regulators is decades-old U.S. money-laundering laws.
World's biggest hedge fund flags the 'holy grail' that may shield investors if U.S. stock rally crumbles
The world's largest hedge fund by assets has cautioned clients against betting on a continued unchallenged rally for U.S. stocks, and offered up what they called the "holy grail" of portfolio protection.
"Investors are more concentrated in stocks than ever, especially U.S. stocks. They are - implicitly or explicitly - betting that U.S. stocks will keep winning, as they have for the past few decades. But valuations are much higher than they were when stocks started this bull run," Karen Karniol-Tambour, co-chief investment officer at Bridgewater Associates, wrote in a new note to investors that was published Thursday.
Disaster Tax Breaks-Finally-Head for Biden's Approval
WASHINGTON-A long-stalled set of tax breaks for natural-disaster victims is headed to President Biden's desk, promising relief for people who suffered property damage from hurricanes, wildfires and other disasters.
The Senate passed the bill without opposition late Wednesday, following a 382-7 House vote in May. The $4.9 billion legislation would aid disaster victims from events as far back as December 2020. And the bill would offer tax breaks to people affected by recent hurricanes, including those in Florida and North Carolina.
Beijing Has Picked Off Taiwan's Remaining Allies. Taiwan Is Fighting Back.
PALAU-For Taiwan, an island democracy isolated and intimidated by its far larger rival regime in Beijing, a key to its fight for security and recognition lies in a handful of even smaller island democracies in the Pacific.
Taiwan President Lai Ching-te has been traveling across the region this week to shore up support from those countries-three of Taipei's dozen remaining official allies-while stopping in Taiwan's biggest, albeit unofficial, ally, the U.S.
(MORE TO FOLLOW) Dow Jones Newswires
12-05-24 0632ET
