Futures Inch Lower
US stock futures dipped slightly below the flatline early Friday as investors anxiously await the much-anticipated labor market report, which could impact the Federal Reserve’s upcoming policy decisions. By 03:45 ET (07:45 GMT), Dow futures were down 165 points or 0.4%, S&P 500 futures slipped by 38 points or 0.7%, and Nasdaq 100 futures fell 210 points or 1.1%.
Despite a choppy trading session on Thursday, the Dow Jones Industrial Average finished in the red, while the Nasdaq Composite gained slightly. Earlier reports revealed that US private employers added the fewest workers since 2021, easing concerns with data suggesting a decline in jobless claims and a rise in services sector activity.
September continues its historical trend as a weaker month for stocks, with the S&P 500 already down more than 2.5%.
Crucial Nonfarm Payrolls Report Ahead
Today’s big market event is the release of the August nonfarm payrolls report from the Bureau of Labor Statistics. Economists predict that the US added 164,000 jobs in August, an increase from 114,000 in July, which fell short of expectations and triggered concerns about a potential recession.
The report could heavily influence the Fed’s strategy at its upcoming Sept. 17-18 meeting. The FedWatch Tool suggests a 59% chance the central bank will reduce interest rates by 25 basis points. However, if the payrolls data disappoints, the Fed may opt for a deeper 50-basis point cut. With interest rates currently at a 23-year high, this report is crucial to shaping future policy.
Broadcom Sales Outlook Disappoints
Shares in Broadcom took a hit after-hours as the company’s sales guidance for the upcoming quarter fell short of expectations. Broadcom projects revenue of $14 billion for Q4, just below analysts’ forecasts of $14.04 billion.
Weakness in Broadcom’s broadband unit, which saw a 49% revenue drop in Q3, dampened otherwise strong demand for its AI-optimized chips. The company raised its AI revenue forecast to $12 billion for the year, up from $11 billion, but investors are increasingly cautious about whether the boom in AI chip demand may be starting to fade.
Seven & i Rejects Couche-Tard Offer
Seven & i Holdings, owner of 7-Eleven, rejected a $38.5 billion cash offer from Alimentation Couche-Tard, citing that the offer was not in the best interests of shareholders. The deal, which would have been the largest foreign buyout of a Japanese company, was deemed “opportunistically timed” and likely to face regulatory hurdles in the US.
Couche-Tard remains optimistic about the acquisition, with CEO Alex Miller confident in financing and completing the deal despite regulatory concerns.
Oil Prices Steady
Oil prices rose in early European trading as markets awaited the US nonfarm payrolls report and reacted to a substantial decline in US crude inventories, as well as a possible production delay from OPEC+ producers. At 03:46 ET, Brent was up 0.5% to $73.06 per barrel, while WTI rose by 0.5% to $69.48. Despite this morning’s gains, both contracts are on track for weekly declines.
Analysts are cautious ahead of the jobs report, especially after last month’s weak payroll numbers caused a sell-off. US crude stockpiles fell by 6.9 million barrels last week, far exceeding the forecasted draw of 1 million barrels.
Last nights live session was super valuable with the information Greg provided. It was recorded so be on the lookout for the link later today. See you all in chat.
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