NFPs, China’s Covid Kingpin, Tech Layoffs

© Reuters.

By Geoffrey Smith — The United States releases its official labor market report for October, which is expected to show hiring slowed further last month due to a cooling economy. This picture is corroborated in real time by the announcement of layoffs and hiring freezes at some leading tech companies. Chinese stocks had their best week in 11 years on growing hopes of an end to the “zero-Covid” policy. This dragged commodity prices and mining stocks in its wake. Elon Musk is about to ax Twitter, but a long list of big-name advertisers has already beaten him to it. Here’s what you need to know in the financial markets this Friday, November 4.

1. The jobs report should show a slowdown in hiring

It’s job day. The numbers may not have the impact they usually have, given that they come just two days after the Federal Reserve’s latest decisions and guidance, which made it clear that something remarkable will be needed. to prevent the central bank from raising more until next year.

The report may not even have the same psychological impact as Thursday’s reports that tech giants such as Apple (NASDAQ:) and Amazon (NASDAQ:) – previously hoped to be immune to the slowdown general – suspend hiring, at least in some parts of their business.

Analysts expect them to have increased by 200,000, which is below the estimate of 239,000 additional private sector jobs in the month. Growth in is also expected to slow to a rate of 4.7% from 5.0% in September, not least because job growth in recent months appears to have been strongest in (generally lower-paying) jobs. leisure and hospitality. The is expected to rise to 3.6% from 3.5% last month.

2. The story of the Chinese kingpin is back

If the jobs numbers struggle to revive the Fed pivot story, China’s Zero-COVID pivot story is alive after two seemingly big news stories overnight.

Bloomberg reports that Chinese authorities are considering scrapping a system that penalizes airlines for bringing COVID carriers into the country, while one of the country’s top epidemiologists told an investment conference that he expected substantial policy changes within five or six months.

Hong Kong’s stock jumped another 5.4% on the news, capping its best week in 11 years, on hopes that a policy that has been a major drag on growth this year will eventually be abandoned. (even if the country’s health authorities are not yet willing to say so in public).

Base metals and mining stocks also advanced.

3. US stocks are supported by Chinese news; PayPal’s outlook is disappointing

US stock markets are expected to open higher, helped by the prospect of a pivot in China. The announcement of layoffs at Lyft (NASDAQ:) and Stripe, as well as a partial hiring freeze at Amazon, also bolstered expectations of a weak payroll report that should ultimately translate into softer Fed policy.

By 1:25 p.m., the were up 170 points or 0.5%, while the were up 0.7%, and the were up 0.8%. All three major currency indices are nonetheless on course for a weekly loss, due to the pullback following Wednesday’s Fed press conference.

Among the stocks likely to receive particular attention are (NASDAQ:) and (NASDAQ:), both of which beat expectations with their quarterly numbers last Thursday. Although in PayPal’s case, it was a disappointingly low revenue forecast that caught the eye. Duke (NYSE:), AES (NYSE:) and Dominion Energy (NYSE:) are all due to release their results sooner, as are Cardinal Health (NYSE:) and struggling company FuboTV (NYSE:).

4. Musk set to announce job cuts on Twitter as advertisers pull out

The scale of Elon Musk’s (NYSE:) Twitter ax will become clearer, as persistent rumors indicate that the CEO of Tesla (NASDAQ:) wants to lay off half of the company’s 7,500 employees.

“In an effort to put Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday,” Musk wrote in an email to staff on Thursday.

The company certainly appears to be facing difficult circumstances going forward, as big-name advertisers including L’Oreal (EPA:), Mondelez (NASDAQ:), Volkswagen (ETR:), Audi and General Mills (NYSE:) all suspended their placements with Twitter this week due to concerns over Musk’s content policy. The company’s chief commercial officer, Sarah Personette, who was responsible for contacting advertisers, also quit.

5. Oil is supported by Chinese news; rig count and CFTC figures expected later

Crude oil joined the rally sparked by news out of China, surging overnight to its highest level in nearly four weeks.

As of 1:35 p.m., futures on the were up 3.2% at $91.03 a barrel, while the were up 2.8% at $97.36 a barrel.

The rise in prices reflects how ill-equipped the global oil market is to handle a significant rise in Chinese demand, given the lack of spare capacity. Later releases from Baker Hughes and the CFTC may shed some additional light.

Leave a Comment