Jobs data ahead, US dock workers call off strike

Investing.com — U.S. stock futures edged flat as markets braced for a key nonfarm payrolls report on Friday. The figures are expected to point to a stable, albeit slowing, job market picture ahead of the Federal Reserve’s two remaining meetings this year. Elsewhere, port workers on the US East and Gulf coasts are calling off a strike that threatened to put severe pressure on the wider economy.

1. Non-farm payrolls are large

Markets are focused on the release of the September non-farm payrolls report at 08:30 ET on Friday.

The U.S. economy appears to have maintained a moderate pace of job growth in the final month of the third quarter, while the unemployment rate is seen as equal to August’s 4.2 percent level.

If key readings from the Labor Department meet those expectations, it could lessen the need for the Federal Reserve to launch another 50 basis point interest rate cut at the central bank’s upcoming meetings in November and December. The Fed announced a huge cut in borrowing costs at its meeting last month, partly fueled by a desire to strengthen the labor market.

Potentially impacting the report could be Hurricane Helene, which tore through parts of the U.S. Southeast last week, and an ongoing strike by Boeing (NYSE: ) workers in the U.S. Pacific Northwest.

The numbers, along with job openings and private payrolls data from earlier this week, are widely expected to point to a sustained and orderly slowdown in job demand supported largely by steady wage growth.

2. Disabled futures

US futures were lower on Friday as investors braced for the release of crucial US jobs data.

By 03:27 ET (0727 GMT), the contract and both were largely unchanged, while they were up 25 points, or 0.1 percent.

Major indexes ended the previous session slightly lower, signaling a note of caution ahead of the non-farm payrolls report. Traders were also looking at escalating tensions in the Middle East.

The benchmark was down 10 points, or 0.2 percent, 30 stocks were down 185 points, or 0.4 percent, and the tech was down 7 points, or 0.04 percent.

In a note to clients, analysts at Vital Knowledge said recent stock market trends have been marked by stimulus measures from the Chinese government and a series of interest rate cuts by global central banks offsetting higher valuations of actions.

“The former (is) preventing sustained and extended declines, while the latter acts as an obstacle to further material gains,” the analysts said.

“We think stimulus is ultimately the stronger of these two compensating forces, which will keep stocks trending higher, but high (price-to-equity ratios) will leave stocks exposed to negative headlines.”

3. The port workers suspend the strike

US dockworkers on the East and Gulf coasts are set to call off a days-long strike after their union and the group representing major maritime firms reached an agreement on Thursday.

The work stoppage has shut down ports from Maine to Texas, threatening large parts of the US economy by crippling supply chains and imports of goods such as food and pharmaceuticals. Analysts at JPMorgan said the strike was costing the economy up to $4.5 billion a day, the Financial Times reported.

The tentative deal will see wages rise by about 62 percent over six years, Reuters reported, citing two sources familiar with the matter. The number would fall between the 77% sought by the International Liquidators Association (ILA) workers’ union and the nearly 50% offered by the employers’ group, the United States Maritime Alliance (USMX).

In a statement, the ILA and USMX said they will extend their main contract until January 15 of next year. However, key issues remain between the two, including workers’ concerns that automation in ports could cause job losses.

Shares in shipping companies fell following the announcement, including Denmark’s AP Moeller – Maersk (CSE: ). Investors banking on a rebound in freight rates recently depressed by the strike were disappointed, analysts told Reuters.

4. Seven & i Holdings eyes sale of majority stake in supermarkets – reports

Japan’s Seven & i Holdings ( TYO: ) is considering a possible sale of a majority stake in its supermarket business, including its main division Ito-Yokado, according to the business daily.

The parent company of convenience store chain 7-Eleven is looking to sell the units to overseas investment funds, among other potential suitors, the Nikkei reported. The trial is set to begin as early as the end of this year, he added.

A Seven & i spokesman quoted by Reuters said the move was “not something officially announced by our company”, noting that “there are no facts that have been decided at this time”.

In September, Seven & i rejected a $38.5 billion takeover bid from Canada’s Alimentation Couche-Tard. It would have been the largest foreign acquisition in Japanese corporate history.

5. Oil earnings

Oil prices rose slightly on Friday and were on track for their biggest weekly gain in more than a year on increased risk of an escalating conflict in the Middle East.

By 03:28 ET, Brent had gained 0.4% to $77.96 a barrel, while WTI futures were trading 0.5% higher at $74.06 dollars per barrel.

futures were set to gain around 8% for the week – the most since February 2023, while the 8% weekly gain in US crude futures would be the biggest since last March.

(Reuters contributed reporting.)