Futures Dump Ahead Of Payrolls Despite Musk's "Super Bad Feeling"
Categories: Crypto News US
Tech stocks led US index futures slumped on the last day of the week, after a report about looming job cuts at Tesla deepened concerns about economic growth, and confirming what we wrote a week ago in "We Could See A Million Layoffs Or More" - Here Comes The Job Market Shock. Futures were lower as dismal trading volumes accentuating every sell order, and further reduced by UK holidays marking the Queens Jubilee. And speaking of the job market, in less than an hour we get the May payrolls print, where Wall Street consensus expects the a +320k number vs. +428k in April, although the whisper number is currently lower than survey at +301k, and as we noted last night, the odds of a negative print are non-trivial. Of course, should we get a subzero print, watch stocks explode higher as the Fed's tightening plans are for all intents and purposes crushed. The Bloomberg dollar index steadied after overnight losses, Treasury yields held at around 2.91%, bitcoin resumed its slide and gold rose. Investors remain on edge as some fear the pace of US monetary tightening could throw the world’s largest economy into a recession. Friday’s May labor report is likely to show the smallest gain in jobs since April 2021 alongside a down shift in average hourly earnings growth, Bloomberg Economics said.“Investors remain nervous, trying to collect more information about earnings prospects on one side and economic data on the other,” said Cedric Ozazman, head of investment solutions at Mirabaud & Cie SA in Geneva. “The jobs report will be crucial as any bad news will reignite speculation about a pause in the Fed monetary tightening cycle during the last quarter of the year." Of course, that means that “any bad economic news might be actually good for risky assets, as they will probably remove some pressure on interest rates,” Ozazman said. Australian stocks rebounded, with the S&P/ASX 200 index rising 0.9% to close at 7,238.80, recouping Thursday’s 0.8% loss in a rally led by miners. Champion Iron gained on higher iron ore prices. Healius was the worst performer after flagging more difficult conditions in 2H. In New Zealand, the S&P/NZX 50 index rose 0.6% to 11,417.34. The gauge added 3.2% since Monday, posting its best week since Feb.In FX, a Bloomberg dollar gauge steadied after yesterday’s loss and the euro traded around $1.0750. A day after pricing in a 50 basis-point rate hike by the ECB by the end of the year, traders are now betting that the move will happen by October itself. Australia’s swap spreads widened to the most in almost six years on speculation that the Reserve Bank will become more hawkish next week. In rates, Treasuries are mostly unchanged across the curve with losses led by front-end, flattening spreads with 2s10s and 5s30s both tighter by over 1bp. 10-year TSY yields around 2.92%, flat on the day; bunds lag by additional 2bp in the sector. European bonds drifted at the open after yields rose to multi-year highs Thursday. US IG dollar issuance slate empty so far; four borrowers priced $3BNBThursday, pushing weekly volume up to $30b and high end of $25b to $30b forecast. Bloomberg notes that there has been some speculation that a jumbo Oracle deal (around $20BN) could come as early as next week which may see some rate lock selling flows weigh over Friday’s session.