Top 5 Things to Know in the Market on Friday

  • Economy News
Top 5 Things to Know in the Market on Friday
Credit: © Reuters. -- It's payrolls day, and hiring in the U.S. economy is expected to have rebounded in November from October's dip due to the end of the strike at General Motors (NYSE: GM ). Elsewhere, OPEC and its allies are set to sign off on a largely symbolic cut in output through March 2021, while Saudi Aramco is now the world's most valuable company after completing its $25.6 billion IPO. Here's what you need to know in financial markets on Friday, 6th December.

1. Payrolls Day

The Commerce Department will release its monthly survey of the U.S. labor market, the most closely-watched update on the health of the U.S. economy, at 8:30 AM (1330 GMT). The headline nonfarm payrolls number is expected to have picked up to 186,000 from a four-month low of 128,000 in October, although the monthly fluctuation is somewhat distorted by the end of the strike at General Motors (NYSE: GM ).

In a still-tight labor market, arguably the more important number will be average hourly earnings growth, which have dipped slightly to an annual rate of 3.0% for the last two months. They’re expected to stay at that rate. Likewise, average weekly hours worked are expected to stay at 34.0.

The numbers come after a much weaker-than-expected report on private-sector payrolls from ADP (NASDAQ: ADP ) earlier in the week.

2. OPEC+ to sign off on a sort of production cut

The Organization of Petroleum Exporting Countries said after a marathon session of haggling between its members that it wants to take another 500,000 barrels a day of production off world markets through March 2020. The cut is largely symbolic because OPEC is already producing less than the agreed ceiling under the existing deal on output restraint.

Under the proposal, OPEC countries would cut their output by 395,000 barrels a day, while its allies led by Russia would cut another 105,000 barrels a day. There is, however, a big loophole: Russia’s production of gas condensate, estimated at 700,000 barrels a day next year, won’t be included in the calculations. Saudi Arabia, meanwhile, is already producing well below its output ceiling, meaning that the actual outcome for markets will depend on the behavior of countries like Iraq and Nigeria, who have repeatedly breached their quotas in recent months.

The measures, which need to be ratified by a meeting that is still in progress, are intended to stop a fresh glut forming on world markets, but analysts are skeptical that what’s been announced will be enough. Crude oil traders, who have pushed prices nearly 4% higher this week in anticipation of deeper output cuts, have decided to hold fire until they see more details.

(CORRECTION: An initial version of this article incorrectly reported the timeframe for the cuts)

3. Stocks set to open higher on Chinese tariff waiver

U.S. stock markets are set to open higher Friday, encouraged by a Chinese government decision to waive import tariffs on U.S. pork and soybeans . Beijing had imposed a 25% tariff on both in response to U.S. tariff increases earlier in the year.

By 6:25 AM ET (1125 GMT), Dow futures were up 73 points or 0.3%, while S&P 500 Futures were up 0.3% and Nasdaq 100 futures were up 0.4%.

Stocks to watch this morning include Zoom Video , which fell sharply in after-hours trading after its outlook failed to match Wall Street’s ambitious expectations. By contrast, Crowdstrike and DocuSign both popped higher after their earnings after the bell on Thursday.

4. The world's most valuable company

Saudi Aramco finally broke the record for the world’s largest-ever initial public offering, raising the equivalent of $25.6 billion through the sale of a 1.5% stake.

The deal, which was priced at the top end of the bookbuilding range of 30 to 32 Saudi riyals, valued the company at some $1.7 trillion. While that makes Aramco officially the world’s most valuable company, it’s some 15% less than the valuation the kingdom had initially hoped for.

The sale ultimately reflects the seller’s failure to attract institutional buyers from developed capital markets due to its refusal to compromise on core concerns around governance. Trading on the Saudi exchange is due to begin next week.

5. Uber's report details extent of safety flaws

Uber (NYSE: UBER ) said it had fielded nearly 6,000 reports of sexual abuse by its drivers in the U.S. in the past two years, confirming one of the most serious fears about its governance.

The report, which was commissioned by the company itself in the wake of founder Travis Kalanick’s departure as CEO, comes less than two weeks after the city of London said it would suspend the company’s license to operate because of repeated failures in monitoring drivers.

There were 515 incidents of rape or attempted rape in 2018 alone - almost 10 a week - the report said.

The numbers are still small in relation to the 2.3 billion rides booked by Uber (NYSE: UBER ) in the two years under examination. Uber calculated that 99.9% of its trips are safe.

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