Oct 4 2024: US stock futures remained flat as investors awaited the release of the crucial nonfarm payrolls report on Friday. This report is expected to provide insight into the labor market’s status as the Federal Reserve prepares for its final two meetings of the year. Meanwhile, a strike by US dockworkers on the East and Gulf Coasts has been suspended, alleviating some pressure on the broader economy.
Nonfarm Payrolls in Focus
All eyes are on the release of the September nonfarm payrolls report, scheduled for 08:30 ET on Friday. Economists predict that the US labor market maintained moderate job growth in the final month of the third quarter, with the unemployment rate expected to hold steady at 4.2%, unchanged from August.
If the report meets expectations, it could reduce the likelihood of the Federal Reserve introducing another 50-basis point rate cut during its upcoming November and December meetings. The Fed already enacted a significant rate cut last month, partially in response to labor market concerns. However, factors such as Hurricane Helene, which affected parts of the Southeast, and a Boeing strike in the Pacific Northwest may influence the report’s outcome.
Earlier job openings data and private payroll reports this week have indicated a gradual slowing in labor demand, along with steady wage growth.
Muted Futures Trading
US stock futures were relatively unchanged on Friday as investors awaited the jobs data. By 03:27 ET (07:27 GMT), Dow and S&P 500 futures were mostly flat, while Nasdaq 100 futures rose slightly by 25 points, or 0.1%. The market’s cautious mood follows a slight dip in the major indices during the previous session, fueled by concerns over escalating tensions in the Middle East.
In Thursday’s trading, the S&P 500 fell 0.2%, the Dow Jones Industrial Average dropped 185 points (0.4%), and the Nasdaq Composite inched down by 0.04%. Analysts at Vital Knowledge noted that recent stock market performance has been shaped by Chinese government stimulus and global interest rate cuts, which helped balance higher stock valuations. However, they warned that elevated price-to-earnings ratios could leave markets vulnerable to negative headlines.
Dockworkers End Strike
Dockworkers across the US East and Gulf Coasts have suspended their strike after reaching an agreement with the shipping companies. The work stoppage, which closed ports from Maine to Texas, had disrupted supply chains and threatened significant economic impact, costing the economy as much as $4.5 billion a day, according to analysts at JPMorgan.
The tentative deal includes a wage increase of approximately 62% over six years, falling between the 77% sought by the dockworkers’ union (ILA) and the 50% offered by the United States Maritime Alliance (USMX). However, key issues remain unresolved, including concerns over automation and its potential impact on jobs. Shares of shipping companies like AP Moeller-Maersk fell after the deal announcement, as investors had expected a strike-driven rebound in freight rates.
Seven & i Holdings Considers Supermarket Sale
Japan’s Seven & i Holdings, the parent company of 7-Eleven, is reportedly considering selling a majority stake in its supermarket businesses, including the Ito-Yokado division. According to Nikkei business daily, potential buyers include overseas investment funds, and the sale process could begin by the end of this year.
In response, a spokesperson for Seven & i said no official decision has been made, and the company has not announced anything regarding the sale. This follows Seven & i’s rejection of a $38.5 billion takeover offer from Canada’s Alimentation Couche-Tard in September.
Oil Prices Rise
Oil prices ticked higher on Friday, heading toward their largest weekly gain in over a year due to increased risks of a broader conflict in the Middle East. Brent crude was up 0.4%, trading at $77.96 per barrel, while US crude futures (WTI) rose 0.5% to $74.06 per barrel.
Brent was on course for an 8% weekly rise, its steepest since February 2023, while WTI was set for an 8% weekly gain, the largest since March 2023. (Reuters contributed reporting.)