The Dow Jones Industrial Average opened flat this morning as investors digested the October jobs report released by the U.S. Labor Department. The U.S. unemployment rate fell to 3.7% in September, and total nonfarm payroll employment increased by 134,000 over the month (average economist expectations were pegged at 185,000).
Today, no major U.S. companies will report earnings. Instead, keep an eye on the Canadian unemployment, an update on inflation rates in Brazil and Russia, and additional analysis on U.S. wages, payrolls, and employee hours.
But first, here are the numbers from Thursday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.
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The Top Stock Market Stories for Friday
- The red-hot U.S. labor market has some concerned about a potential market correction due to higher wage growth and higher interest rates. The U.S. Federal Reserve is likely to raise its benchmark rate at least one more time in 2018. The yield on the 10-year Treasury note hit its highest level since 2011 on Thursday. Earlier this week, Fed Chair Jerome Powell said that the central bank had a way to go before interest rates would be neutral, which suggests that even more hikes could be coming in 2019 and 2020.
- Chinese technology stocks are sinking like stones. Computer maker Lenovo Group Ltd. (LNVGF) and telecom hardware maker ZTE Corp. (ZTCOF) were both off by double digits after Bloomberg News reported that the Chinese military hid microchips in computer motherboards and sold them to Amazon.com Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL). Although both U.S. firms deny the details of the report, the Chinese Foreign Ministry has yet to issue a comment. The accusation comes at a very delicate time as both the United States and China remain locked in a significant trade battle that has weakened relations between the world's two largest economies.
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Four Stocks to Watch Today: UL, SSNLF, TSLA, SNAP
- Snap Inc. (NYSE: SNAP) is absolutely certain that it will become profitable in 2019. Despite the stock falling more than 45% this year and it now where close to its IPO, a company memo was leaked from a top executive that they have a goal of profitability for the full year of 2019. And it seems that a few investors are willing to believe them as shares are up 3.2% this morning. Keep in mind that this memo was leaked after the stock took a 5% hit on Thursday.
- Today, conglomerate Unilever NV (NYSE: UL) announced that it has abandoned a plan to move its operating headquarters out of the United Kingdom to the Netherlands. The move was originally announced ahead of the Brexit, which continues to barrel forward with tremendous uncertainty for politicians, citizens, and UK-based companies. The firm's stock was off nearly 1% after it announced that a "significant group of shareholders" did not support the relocation plan.
- Shares of Tesla Inc. (NASDAQ: TSLA) fell 4.4% after CEO Elon Musk made a rather reckless accusation at the U.S. Securities and Exchange Commission. Musk referred to the SEC as the "Shortseller Enrichment Commission." His mocking comes just days after Musk settled fraud charges stemming back to his claims in August that he had failed to inform the agency about material company events and misled investors that he had secured funding to take Tesla private. As part of the settlement, Musk also agreed to step down from his role of chair for at least three years and to have his Twitter messages vetted by company officials to ensure he isn't sharing material information about Tesla.
- Samsung Electronics Co. Ltd. (OTC MKTS: SSNLF) said it will likely report its best quarterly earnings ever. The South Korean tech giant announced that its quarterly operating profits will come in at roughly $15.6 billion. The figure would be a 20% jump from the previous quarter. The largest smartphone manufacturer – which has benefited from strong sales of its Samsung 9 products – will report its quarterly earnings at the end of October
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.