S&P Futures Tread Water as Key U.S. Jobs Report Looms

December S&P 500 E-Mini futures (ESZ24) are trending down -0.08% this morning as investors cautiously awaited the all-important U.S. jobs report that will help determine whether the Federal Reserve will lower or hold interest rates later this month.

In yesterday’s trading session, Wall Street’s major indices ended lower. Synopsys (SNPS) plunged over -12% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the chip design software firm provided below-consensus 2025 revenue guidance. Also, SentinelOne (S) slumped more than -13% after the cybersecurity company reported a wider-than-expected Q3 loss. In addition, American Eagle Outfitters (AEO) tumbled over -14% after reporting weaker-than-expected Q3 revenue and cutting its full-year comparable sales forecast. On the bullish side, Brown-Forman (BF.B) climbed more than +10% and was the top percentage gainer on the S&P 500 after the company posted upbeat FQ2 results. Also, Tesla (TSLA) gained over +3% after BofA raised its price target on the stock to $400 from $350. 

The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week rose by +9K to a 6-week high of 224K, compared with the 215K expected. Also, the U.S. October trade deficit narrowed to -$73.80B from -$83.80B in September, better than expectations of -$75.70B.

“We’ll get a fuller picture from [Friday’s] monthly jobs report, but for now, the story continues to be a labor market that occasionally appears to bend, but avoids breaking,” said Chris Larkin at E*Trade from Morgan Stanley.

Meanwhile, U.S. rate futures have priced in a 67.5% chance of a 25 basis point rate cut and a 32.5% chance of no rate change at December’s monetary policy meeting.

Today, all eyes are focused on the U.S. monthly payroll report, which is set to be released in a couple of hours. Economists, on average, forecast that November Nonfarm Payrolls will come in at 218K, compared to October’s figure of 12K.

A survey conducted by 22V Research revealed that 45% of investors expect key U.S. jobs data to be “mixed/negligible,” 32% anticipate it will be “risk-off,” and 23% foresee “risk-on.”

U.S. Average Hourly Earnings data will also be closely watched today. Economists expect November figures to be +0.3% m/m and +3.9% y/y, compared to the previous numbers of +0.4% m/m and +4.0% y/y.

The U.S. Unemployment Rate will be reported today. Economists foresee this figure to remain steady at 4.1% in November.

The University of Michigan’s U.S. Consumer Sentiment Index will come in today. Economists forecast the preliminary December figure to be 73.1, up from last month’s figure of 71.8.

U.S. Consumer Credit data will be released today as well. Economists expect this figure to stand at $10.10B in October, compared to the previous figure of $6.00B.

In addition, market participants will be anticipating speeches from Chicago Fed President Austan Goolsbee, Cleveland Fed President Beth Hammack, and San Francisco Fed President Mary Daly.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.195%, up +0.32%.

The Euro Stoxx 50 futures are up +0.34% this morning as investors continued to monitor political developments in France while also awaiting the key U.S. jobs report. Luxury stocks gained ground on Friday. Final data from Eurostat released on Friday confirmed that the Eurozone economy expanded by 0.4% in the third quarter. Separately, data from the Federal Statistical Office showed that Germany’s monthly industrial production fell again in October, highlighting ongoing challenges in the sector. Meanwhile, French President Macron pledged to appoint a new Prime Minister in the coming days and form a “government of general interest.” Marine Le Pen, leader of the National Rally, told Bloomberg News that a budget could be delivered within weeks. In corporate news, Direct Line Insurance Group Plc (DLG.LN) climbed over +6% after receiving a sweetened takeover offer from Aviva Plc.

Germany’s Industrial Production, Eurozone’s GDP, and Eurozone’s Employment Change data were released today.

The German October Industrial Production arrived at -1.0% m/m, weaker than expectations of +1.0% m/m.

Eurozone GDP has been reported at +0.4% q/q and +0.9% y/y in the third quarter, in line with expectations.

Eurozone Employment Change stood at +0.2% q/q and +1.0% y/y in the third quarter, in line with expectations.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +1.05%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.77%.

China’s Shanghai Composite Index closed higher today amid expectations that Chinese authorities will announce additional stimulus measures at a key policy meeting next week. The benchmark index posted its second consecutive weekly gain. Insurance and technology stocks outperformed on Friday. Healthcare stocks also gained ground on upbeat sentiment following media reports that U.S. lawmakers are considering a potential compromise on the Biosecure Act. Meanwhile, investors are looking forward to the Central Economic Work Conference for potential policy updates. Bloomberg News reported earlier this week that the nation’s top leaders are expected to outline economic targets and stimulus plans for 2025 at the annual closed-door meeting starting Wednesday. Expectations are also growing among Wall Street banks that the People’s Bank of China will implement its largest interest rate cuts in a decade next year as policymakers ramp up efforts to bolster growth and counter deflation. Goldman Sachs and Morgan Stanley are among the firms forecasting cuts of 40 basis points to the PBOC’s main policy rate in 2025. In corporate news, Yibin Paper Industry surged about +10% on plans to apply for a 124 million yuan loan to partially fund the acquisition of an acetate fiber company.

Japan’s Nikkei 225 Stock Index ended lower today as investors booked profits following four days of gains, with caution prevailing ahead of key U.S. jobs data scheduled for release later in the day. Chip stocks were among the worst performers on Friday, pressured by overnight losses in their U.S. counterparts. Despite Friday’s drop, the benchmark index ended the week with gains. Government data released on Friday showed that Japan’s base salary increased at the fastest pace in 32 years in October, boosting real wages after two months of declines. This could prompt the Bank of Japan to consider a rate hike in December. Separately, preliminary data from the Cabinet Office showed that Japan’s leading economic indicators index, which gauges the economic outlook for a few months ahead based on data such as job offers and consumer sentiment, fell more than expected in October. In addition, data showed that Japanese household spending fell at a slower-than-anticipated rate in October. Meanwhile, Yoshihiko Noda, leader of Japan’s largest opposition party, told Reuters on Friday that the BOJ should hike interest rates and persist in winding down its controversial stimulus program. In other news, a Reuters poll indicated that the Japanese economy likely grew in the third quarter at the same moderate pace as initially reported, but an uptick in private consumption might be short-lived and could cast doubt about policymakers’ views on the growth outlook. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +3.10% to 22.92.

The Japanese October Household Spending came in at +2.9% m/m and -1.3% y/y, stronger than expectations of +0.4% m/m and -2.6% y/y.

The Japanese October Leading Index arrived at 108.6, weaker than expectations of 108.9.

Pre-Market U.S. Stock Movers

Ulta Beauty (ULTA) surged over +11% in pre-market trading after the cosmetics retailer reported better-than-expected Q3 results and raised its full-year EPS guidance.

Lululemon Athletica (LULU) climbed more than +8% in pre-market trading after the athleisure retailer posted solid Q3 results and raised its full-year guidance.

DocuSign (DOCU) soared about +15% in pre-market trading after the company reported upbeat Q3 results and issued above-consensus Q4 revenue guidance.

GitLab (GTLB) advanced over +9% in pre-market trading after reporting stronger-than-expected Q3 results and boosting its annual guidance.

Altria Group (MO) gained more than +1% in pre-market trading after BofA upgraded the stock to Buy from Neutral with a price target of $65.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - December 6th

BRP Inc (DOOO), Genesco (GCO), Kirklands (KIRK).