All Eyes are on U.S. Nonfarm Payrolls

All eyes are on today’s Nonfarm Payrolls publication which is hoped to shed more light on U.S. policy going forward. U.S. equities tumbled as a report showing better-than-anticipated hiring in the private sector increased expectations that the Fed will keep raising interest rates to tamp down inflation. The ADP jobs data came a day before the Labor Department is set to release the December nonfarm payrolls report, which is also projected to indicate the labor market remains strong. The Dow, S&P 500, and Nasdaq all slid 1% or more.

Walgreens Boots Alliance (WBA) shares sank 6% as the largest U.S. pharmacy chain posted a quarterly loss after taking a $5.2 billion charge to pay for opioid-related claims and litigation. Tech stocks were mostly lower, with shares of Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Salesforce (CRM), and Tesla (TSLA) losing ground. Amazon (AMZN) shares slipped after the online retailer announced more job cuts than had been estimated as it moves to reduce costs.

Earningswise, Samsung (005930.KS) profits dropped by the most in over a decade, in a sign that the global economic slowdown may be hurting electronics demand even more than anticipated. South Korea’s largest company has been grappling with weak demand for memory chips, smartphones and displays as consumers tamp down holiday spending amid soaring interest rates and inflation. Adding to demand woes, Apple (AAPL), one of Samsung’s biggest customers for displays and memory chips, suffered production delays at its iPhone assembly complex in the Chinese city of Zhengzhou.

Sectorwise, classic energy names were among the best-performing stocks in the S&P 500 yesterday as oil outperformed.

European equities are on course for gains ahead of critical U.S. employment data. Stock markets are closed in several countries, such as Sweden, Finland and Greece. According to Eurostat, the volume of retail trade in the euro area rose by 0.8% in November, while in the EU, it has increased by 0.9% MoM. On an annual basis, the figure was down by 2.8% in the euro area and 2.4% in the EU.

At the time of writing, the German DAX advanced by just 0.03%, as MTU Aero Engines (MTX.DE) climbed 0.98%. The British FTSE 100 rose by 0.34%. The best performer was Anglo American PLC (AAL.L), going up 1.87%. Concurrently, the French CAC 40 gained 0.40%, as Renault (RNO.PA) jumped 2.12%, while the Euro Stoxx 600 advanced by 0.22%.

Stock markets in Asia traded mostly higher on Friday as Japan's service sector recorded the fourth straight month of growth in the latest report for December. In earnings, Samsung released its preliminary data, revealing a 69% plunge in operating profits in the fourth quarter. Japan’s Nikkei 225 grew by 0.59% at the close, the Korean Kospi Composite gained 1.12%, and the Australian S&P/ASX 200 moved up by 0.50%. The Shanghai Composite rose by 0.08%, the Shenzhen Composite added 0.32%, while Hang Seng lost 0.07%.