Employment Report for May
Today's Top Headlines/Must Reads:
- Jobs Report Expected to Show Unemployment Still Historically
- Senate Approves Deal Raising Debt Ceiling, Averting U.S.
- As China Risks Grow, Manufacturers Seek Plan B-and C and D
- Nvidia Is Still a 'Buy' on Wall Street
Follow WSJ market coverage here
Stock futures pointed to a higher open on Friday after a
debt-ceiling bill cleared a final hurdle, and as investors turned
their attention to jobs data that could help cement a pause in
Federal Reserve interest-rate hikes.
"The Fed clearly sends a message that they no longer see urgency
in hiking the rates, while also letting investors know that their
job fighting inflation is not done just yet. That's a way of
managing market expectations: pausing rate hikes, without however
letting the market conditions loosen due to excess dovish
speculation," Swissquote Bank said.
The next set of jitters, though, may come from an expected flood
of Treasury bill issuance as the government tries to rebuild its
coffers that have been drained by the weeks-long debt-ceiling
standoff. Some analysts have warned of a potential liquidity
squeeze that could trigger volatility for markets.
Overseas stocks gained. The Stoxx Europe 600 rose 0.7% while
Hong Kong's Hang Seng rallied 4%. Japan's Nikkei 225 rose 1.2%.
Stocks to Watch
Broadcom stock pointed around 2% lower despite beating earnings
estimates and offering a better-than-expected outlook for the
current quarter. CEO Hock Tan said generative AI applications will
boost demand for its chips.
Dell's revenue plunged in the first quarter by the largest
percentage on record and executives said they expect a similar drop
in the current period. Shares fell nearly 3% in off-hours
Lava Therapeutics on Thursday said a lead candidate aimed at an
undisclosed tumor-associated antigen was selected for further
development toward clinical studies by Janssen Biotech. Shares rose
26% in after-hours trading.
Lululemon Athletica on Thursday raised its outlook for the year
amid significant sales growth in China. Shares rose 15%
MongoDB reported better-than-expected first-quarter results and
said it added the most net new customers in over two years. Shares
rose 25% ahead of the opening bell.
Oncorus said it plans to cut nearly its entire workforce and
anticipates its finances won't meet its needs beyond the third
quarter. Shares fell 24% in after-hours trading.
Tilly's guided for wider-than-expected losses in the fiscal
second quarter. Shares dropped 13% in after-hours trading.
The dollar continues to fall after Fed officials hinted at a
pause in raising rates in June, and non-farm payrolls data could
help determine whether losses continue, ING said.
"Today's U.S. NFP [non-farm payrolls] data will have a major say
in determining whether the Fed hikes in June or not," ING said,
adding that only above-consensus data could dampen prospects of a
"Unless the May NFP surprises on the upside we would say today's
DXY bias lies towards the 103.20 area."
The euro should find support as there is limited scope for lower
front-end eurozone yields given that the European Central Bank
looks set to raise interest rates further, MUFG Bank said.
Although data showed eurozone inflation eased in May, ECB
President Christine Lagarde said on Thursday there wasn't clear
evidence that underlying inflation had peaked, while ECB meeting
minutes reinforced "the prospect of at least two more rate hikes,"
Services inflation could "well drift higher over the summer on
tourism-related inflationary pressures."
The 10-year U.S. Treasury-German Bund yield spread could narrow,
in line with the usual behavior around the time the Federal Reserve
delivers its last interest-rate rise, Societe Generale said.
"Euro area core inflation is not yet in free fall, and the
European Central Bank's stance is less restrictive than the Fed's,"
it said. "This argues in favour of a narrower 10y UST-Bund
Oil prices jumped for a second day after the Senate passed a
bill averting a default.
Focus now turns firmly to this weekend's OPEC+ meeting at which
analysts broadly expect the group to keep production quotas
Oil's outlook in June is likely to hinge on supply trends,
especially the upcoming decision from the OPEC+ meeting later this
week, Hengtai Futures said.
It added that demand-side fundamentals are showing mixed
signals, with U.S. data showing sharply lower inventories buoying
sentiment, but a soft China macro recovery is weighing on trading
Therefore, supply-side factors may be essential in driving
prices. "If officials don't offer clear price support actions at
the upcoming OPEC+ meetings, investors are unlikely to turn more
bullish," Hengtai said.
Base metals prices were pushing higher, while gold was flat in
early London trading, with investors looking to the U.S. jobs
report as the next big macroeconomic indicator.
Aluminum prices will likely remain in range-bound trading this
month, Hengtai Futures said.
It notes that Chinese supply of the base metal is likely on the
rise, with several main producing regions expected to ramp up
output as hydropower capacity becomes more abundant in the summer
More hydropower also means lower production costs of the metal,
which could further weigh on prices, Hengtai said, advising
investors to stay on the sidelines and monitor the supply trend in
the near term.
TODAY'S TOP HEADLINES
Nvidia Is Still a 'Buy' on Wall Street as Analysts Race to Boost
An investor craze for artificial intelligence has powered
Nvidia's dizzying rise and pushed the stock to lofty valuations.
Wall Street analysts are predicting it has more room to run.
Nvidia shares have nearly tripled in 2023, making them the best
performers by far in the S&P 500. The graphics chip maker has
gained more than $650 billion in market value since hitting a
two-year low in October and briefly crossed the $1 trillion mark
earlier this week.
Exxon, Chevron Near Deals to Drill in Gas-Rich Algeria
ALGIERS, Algeria-Exxon Mobil and Chevron are in advanced
negotiations with Algeria on a deal that would allow the U.S.
energy giants to drill for the first time in the gas-rich North
African nation, according to the Algerian energy minister and
people familiar with the discussions.
The deals, which the energy minister said could be complete by
the end of the year, would give the companies a foothold in a
country that is an increasingly important supplier of natural gas
to Europe following Russia's invasion of Ukraine.
The RV Boom Is Over, But These Stocks Promise a Sweet Ride
Here's a sweet deal: a vehicle big enough for your whole family
to live in on "clearance" at 30% off the manufacturer's suggested
Unfortunately, that 39-foot long Thor Challenger 37FH motor home
still will set you back $188,895. Even with a 240 month loan-much
longer than those available to car buyers-your monthly payment
would come to $1,221. Inflation means parking that recreational
vehicle at a campground will cost about 30% more than it would have
just a few years ago and, while pump prices are down from their
peak, a behemoth that gets about 8 miles a gallon makes dealer
Camping World Holdings' "See America for Less" promotion something
of a relative statement.
Twitter's Top Content Moderation and Safety Executive Leaves
Twitter's top official for monitoring safety and content
moderation said she resigned Thursday, the second time an executive
with that role has departed since Elon Musk bought the social-media
company in October.
Ella Irwin, Twitter's head of trust and safety, declined to
comment on the reason for her departure in an interview with The
Wall Street Journal. She said she felt she had always been honest
in her work. Irwin, who joined Twitter about a year ago, had
publicly defended the company's actions since Musk took over as she
navigated a high-profile and often-scrutinized role handling
Judge in Disney-DeSantis Case Recuses Himself
The federal judge handling Walt Disney Co.'s lawsuit against
Florida Gov. Ron DeSantis recused himself Thursday, landing the
case in the hands of a judge who has in the past sided with the
governor in blocking challenges to the sex-education law at the
heart of the lawsuit.
U.S. District Judge Mark Walker was originally assigned to
Disney's case, prompting DeSantis and other defendants to seek to
disqualify him, citing comments he made in other cases that they
said raised doubts about his impartiality. Disney challenged the
motion, saying it misstated facts and misread the law.
Jobs Report Expected to Show Unemployment Still Historically
Friday's jobs report will show whether the labor market remained
resilient in May in the midst of rising interest rates and elevated
Economists surveyed by The Wall Street Journal estimate that
U.S. employers added 190,000 jobs in May. That would be a modest
slowdown from April's gain of 253,000 and the 29th straight monthly
increase. They expect that the unemployment rate ticked up to 3.5%
in May from 3.4% in April, which matched the lowest reading since
Senate Approves Deal Raising Debt Ceiling, Averting U.S.
WASHINGTON-The Senate passed wide-ranging legislation Thursday
that suspends the $31.4 trillion debt ceiling while cutting federal
spending, backing a bipartisan deal struck by President Biden and
House Speaker Kevin McCarthy to avert an unprecedented U.S.
The 63-36 vote reflected support from both Democrats and
Republicans, with backers saying the need to raise the nation's
borrowing limit outweighed concern about provisions related to
military and domestic spending and energy policy, among other
As China Risks Grow, Manufacturers Seek Plan B-and C and D
SINGAPORE-For much of the past decade, Western companies have
sought an alternative to China to manufacture goods-a shift
executives call "China plus one." Increasingly, the strategy looks
more like China plus many.
Apple, with a sprawling production base in China, is rapidly
expanding in Vietnam and India, an emerging smartphone-making hub.
Crocs, which shifted production of a large share of its colorful
shoes from China to Vietnam, recently stepped up sourcing from
Indonesia and is also setting up in India.
When Markets Melt Down, These Traders Cash In
As investors fretted about the possibility that the White House
and Republican lawmakers would fail to raise the debt ceiling, one
$20 billion firm wasn't concerned about the potential stock-market
That's because Miami-based Universa Investments reaps huge
rewards in market crashes. It made billions in 2008 when the market
collapsed during the global financial crisis, as well as in the
2020 crash sparked by the Covid-19 pandemic.
Cybersecurity Risks and Privacy Rules Add Pressure on Boards
Companies shouldn't wait for new rules around cybersecurity,
privacy and emerging technologies to be finalized before preparing
for them, lawyers say, particularly as senior executives with the
right experience can be hard to come by.
Proposed cybersecurity rules from the Securities and Exchange
Commission would require public companies to disclose which board
members have security knowledge or experience, along with details
about the board's approach to cyber oversight. The SEC published
draft rules in March 2022 and is expected to finalize them in the
U.S. Is Willing to Begin Nuclear Arms Dialogue With Russia
The Biden administration is prepared to begin talks without
preconditions with Moscow on steps to limit nuclear arms after the
New Start treaty expires in 2026, national security adviser Jake
Sullivan plans to say in a speech Friday.
But the limits on U.S. nuclear forces that the administration
might accept at that point will be influenced not only by the size
of Russia's nuclear arsenal but also by the pace of China's nuclear
buildup, according to senior administration officials familiar with
Ukraine Says It Stopped Russia's Latest Missile and Drone
Attacks on Kyiv
Russia continued its aerial campaign against the Ukrainian
capital of Kyiv, launching cruise missiles and drones against the
city Thursday night, according to Ukraine's armed forces.
The Ukrainian air force said its air defenses intercepted all 15
of the Russian cruise missiles and all 21 of the Iranian-made
Debt-Limit Bill Cancels Almost $30 Billion in Pandemic Relief
WASHINGTON-A deal between President Biden and congressional
Republicans to lift the debt ceiling claws back billions of dollars
in unspent pandemic relief funding but leaves money in place for
front-line Covid-19 investments such as next-generation vaccines
Almost $30 billion in unspent funding approved during the
pandemic will be rescinded under the legislation, which passed the
Senate Thursday and is headed to Biden's desk, but most of that is
unrelated to Covid-19. Instead, it will be taken from a host of
agencies that have been looking at spending the money on such
programs as highway infrastructure, disaster loans, and rural
broadband expansion, according to people familiar with the
Debt-Ceiling Deal Makes It Kevin McCarthy 3, Detractors 0
WASHINGTON-For House Speaker Kevin McCarthy, pursuing a
bipartisan deal to avoid defaulting on the nation's debt meant
putting his own job at risk. Now he is taking a victory lap, even
as threats to his leadership endure in corners of his party.
On Wednesday, the California Republican successfully shepherded
a must-pass bill through the House to suspend the $31.4 trillion
debt ceiling into early 2025 in exchange for reining in federal
spending. The bill, crafted in breakneck talks with the White
House, then headed to the Senate, where lawmakers quickly passed it
Thursday, to make a June 5 deadline and avoid an unprecedented U.S.
Write to email@example.com TODAY IN CANADA
Nothing major scheduled
Economic Calendar (ET):
Nothing major scheduled
Stocks to Watch:
MCAN Mortgage Names Don Coulter as CEO, President, to Board;
Names Derek Sutherland as Interim CEO; Sutherland Succeeds Karen
Weaver; Coulter to Succeed Sutherland on Dec. 1
StorageVault Purchases Brossard, Quebec Property With Automotive
Properties REIT; StorageVault and Automotive Properties Real Estate
Investment Entered 50/50 Joint Venture to Acquire Automotive
Tidewater Midstream Resumes Operations at Brazeau River Complex
After Wildfire Shutdown
Expected Major Events for Friday
06:45/FRA: Apr Industrial production index
08:30/UK: 1Q Bank of England external business stats
12:30/US: U.S. Weekly Export Sales
12:30/US: May U.S. Employment Report
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Friday
Abraxas Petroleum (AXAS) is expected to report for 1Q.
Andrea Electronics Corp (ANDR) is expected to report for 1Q.
Environmental Tectonics Corp (ETCC) is expected to report for
Exicure Inc (XCUR) is expected to report for 1Q.
Hurco Cos (HURC) is expected to report for 2Q.
Ocean Biomedical Inc (OCEA) is expected to report for 1Q.
Odonate Inc (ODTC) is expected to report $-1.17 for 1Q.
Webco Industries Inc (WEBC) is expected to report for 3Q.
Wins Finance Holdings Inc (WINSF) is expected to report for
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ANALYST RATINGS ACTIONS
Adicet Bio Cut to Neutral From Overweight by JP Morgan
Advance Auto Parts Cut to Market Perform From Strong Buy by
Advance Auto Parts Cut to Neutral From Buy by Goldman Sachs
Advance Auto Parts Cut to Neutral From Overweight by JP
Alteryx Raised to Buy From Neutral by B of A Securities
AutoZone Raised to Neutral From Underperform by B of A
bluebird bio Raised to Overweight From Equal-Weight by
Cut to Neutral From Buy by DA Davidson
Raised to Outperform From Neutral by Wedbush
Cheniere Energy Partners Cut to Underperform From Peer Perform
by Wolfe Research
Chevron Raised to Outperform From Sector Perform by RBC
Chewy Raised to Buy From Hold by Gordon Haskett
CSX Corp Raised to Buy From Neutral by UBS
Domino's Pizza Raised to Overweight From Neutral by JP
DZS Cut to Market Perform From Outperform by Northland Capital
Entergy Cut to Neutral From Outperform by Evercore ISI Group
Equitrans Midstream Raised to Outperform From Peer Perform by
Exxon Mobil Cut to Sector Perform From Outperform by RBC
First Solar Raised to Hold From Sell by GLJ Research
Genuine Parts Raised to Buy From Neutral by B of A
Lear Raised to Outperform From Neutral by Exane BNP Paribas
NextEra Energy Partners Raised to Neutral From Underperform by B
of A Securities
Novan Cut to Perform From Outperform by Oppenheimer
Nucor Raised to Peer Perform From Underperform by Wolfe
Okta Cut to Neutral From Overweight by JP Morgan
Phillips 66 Raised to Outperform From Market Perform by TD
Presto Automation Raised to Buy From Neutral by Chardan
Salesforce Cut to Hold From Buy by Societe Generale
Sphere Entertainment Cut to Neutral From Outperform by
US Steel Cut to Underperform From Peer Perform by Wolfe
Veeva Systems Raised to Buy From Neutral by Guggenheim
Veritone Cut to Neutral From Buy by Roth MKM
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
June 02, 2023 06:15 ET (10:15 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.