Five Things You Need to Know to Start Your Day
It’s jobs day, Chinese stocks plunge and more signs of a weakening global economy. Here are some of the things people in markets are talking about today.
U.S. employers are expected to have added 180,000 positions in February, down from January’s surprise 304,000, with the nonfarm data released at 8:30 a.m. Eastern Time this morning. The unemployment rate will creep down to 3.9 percent and average hourly earnings will rise 3.3 percent from a year earlier, according to economists surveyed by Bloomberg. While signs of a tight labor market continue, Deutsche Bank points out that February has topped forecasts in each of the past five years with an average beat of 55,000.
China’s Shanghai Composite Index tumbled 4.4 percent overnight, as $345 billion was wiped off the value of the country’s stocks. The selloff came after the nation’s largest brokerage issued a rare sell rating, which investors viewed as an indication that the government wants to slow the recent rally. With the equity market posting gains for the past eight weeks, an $1.8 trillion rally since January, signs of overheating had emerged in all of the country’s major benchmarks.
There were also worrying signals for the wider global economy from China, with exports slumping 21 percent in February. Even though this data is somewhat skewed by the Chinese New Year, aggregating January and February figures still show a 5 percent decline. German factory orders dropped 2.6 percent in January, where a gain had been expected, with the fall caused by weak demand from outside the euro area. It all adds to fears that U.S. trade policy may be doing permanent damage to the world economy.
Overnight, the MSCI Asia Pacific Index declined 1.5 percent, Japan’s Topix index closed 1.8 percent lower and the yen rose as investors fretted the economic outlook. In Europe, the Stoxx 600 Index was 0.7 percent lower at 5:50 a.m. in broad selling that saw banks add to yesterday’s post-ECB losses. S&P 500 futures were lower ahead of payrolls data, the 10-year Treasury yield was at 2.641 percent and gold was higher.
Bad news for any Fed watchers hoping to start their weekend early, as Chair Jerome Powell is due to speak on monetary policy normalization at 10:00 p.m. (Eastern Time). Aside from payrolls, there is U.S. January housing starts and Canadian employment data at 8:30 a.m., agriculture supply and demand estimates at 12:00 p.m. while Baker Hughes updates the rig count at 1:00 p.m.
What we've been reading
This is what's caught our eye over the last 24 hours.
- The Fed and ECB confront a new normal that looks a lot like Japan’s.
- Hedge funds gain in February for strongest start since 2012.
- Norway's wealth fund to drop oil exploration companies.
- Goldman says “public discourse” gets it wrong about buybacks.
- Merkel rejected U.S. pressure to provoke Russia’s navy, sources say.
- The super-rich are being scammed on their private jets.
- It’s November 19.
©2019 Bloomberg L.P.