- Asian Stocks Rally as Jobs Report Boosts Sentiment: Markets Wrap
Asian stocks rose after stronger-than-expected US payroll data underscored the health of the world’s largest
economy and boosted optimism over a soft landing. Equity benchmarks in Australia, South Korea and Japan
all gained after the S&P 500 and Treasury yields rose on Friday as traders trimmed bets on Federal Reserve
interest-rate cuts. US 10-year yields climbed a further one basis point Monday, nearing the key 4% threshold. - Dow jumps 300 points for record close as September’s big jobs report spurs rally
Stocks advanced on Friday after an expectation-defying jobs report gave investors confidence around the
health of the economy. The S&P 500 rose 0.9% to 5,751.07, while the Nasdaq Composite jumped 1.22% to
18,137.85. The Dow Jones Industrial Average added 341.16 points, or 0.81%, to notch an all-time closing high
of 42,352.75. Stocks rallied after data showed nonfarm payrolls grew by 254,000 jobs in September, far
outpacing the forecasted gain of 150,000 from economists polled by Dow Jones. The unemployment rate
ticked down to 4.1% despite expectations for it to hold steady at 4.2%. - Oil pares gains after strongest weekly rise in over a year
Oil prices pared gains in early trade on Monday after charting their biggest weekly rise in over a year on
Friday amid mounting threats of a region-wide war in the Middle East. Brent crude futures fell 43 cents, or
0.5%, to $77.62 per barrel by around 0015 GMT. U.S. West Texas Intermediate crude futures slipped 35
cents, or 0.5%, to $74.03 per barrel. Last week, the Brent contract gained over 8% on a weekly basis and the
most in a week since January 2023, while the WTI contract gained 9.1% week-on-week, the most since March
2023. - Gold falls as stronger U.S. jobs data shrinks hopes of big Fed rate cut
Gold prices fell on Friday after a stronger-than-expected U.S. jobs report boosted the dollar and caused
analysts to scale back expectations of an aggressive rate cut from the Federal Reserve next month. Spot gold
was down 0.3% at $2,647.52 per ounce, after scaling a record high of $2,685.42 last week. U.S. gold futures
lost about 0.5% to $2,666.60. U.S. job growth accelerated in September and the unemployment rate slipped
to 4.1%, further reducing pressure on the Fed to deliver another 50-basis-point rate cut at its Nov. 6-7 policy
meeting. - U.S. job creation roared higher in September as payrolls surged by 254,000
Nonfarm payrolls surged by 254,000 in September, up from a revised 159,000 in August and better than the
150,000 Dow Jones consensus forecast. The unemployment rate fell to 4.1%, down 0.1 percentage point, as
the survey of household employment showed an even stronger picture, with a gain of 430,000. Average
hourly earnings increased 0.4% on the month and were up 4% from a year ago. Both figures were ahead of
respective estimates. - US Inflation Is Set to Reassure a Labor Market-Focused Fed
US inflation probably moderated at the end of the third quarter, reassuring a Federal Reserve that’s shifting
more of its policy focus toward shielding the labor market. The consumer price index is seen rising 0.1% in
September, its smallest gain in three months. Compared with a year earlier, the CPI probably rose 2.3%, the
sixth-straight slowdown and the tamest since early 2021. The Bureau of Labor Statistics will issue its CPI
report on Thursday. - Fed close to pulling off the elusive economic soft landing in 2024 after great September jobs report
September’s outsized payrolls boost takes the U.S. economy out of the shadows of recession and gives the
Fed a glide path to a soft landing. The big jobs gain virtually eliminated any chance that the central bank
would be repeating its half percentage point interest rate cut from September anytime soon. The Fed next
meets Nov. 6-7, right after the U.S. presidential election and a five-week span during which it will get plenty
more to digest. - US Sends Taiwan Anti-Tank Weapons, Machine Guns, Sniper Rifles
The US has sent Taiwan self-guided Longbow anti-tank missiles made by Lockheed Martin Corp., sniper rifles,
machine guns and a range of ammunition, new Pentagon documents show. The weapons and ammunition
are listed in budget documents sent to congressional defense committees as part of efforts to shift funding,
known as reprogramming, to pay for equipment to restock US military shelves. The documents shed a light
on the types of weapon the US sends Taiwan under the Presidential Drawdown Authority under which the US
military dips into its own weapons stocks to send supplies to specific allies. - ‘Frankly ridiculous’: FEMA administrator slams Trump for boosting false Helene recovery claims
Federal Emergency Management Agency administrator Deanne Criswell on Sunday criticized former
President Donald Trump for spreading false information about how the Biden administration allocated
disaster relief funding for Hurricane Helene recovery. It’s frankly ridiculous and just plain false, Criswell said
in an interview on ABC’s “This Week.” “This kind of rhetoric is not helpful to people. It’s really a shame that
we’re putting politics ahead of helping people.” As hurricane season ramps up, Trump falsely claimed last
week that FEMA was running out of money to aid its disaster relief efforts, because the White House had
used the funds on illegal migrants coming into the country. - Biden to Announce More Student-Loan Relief Ahead of Trip
President Joe Biden is planning a pair of economic announcements, including new student loan debt relief,
before departing for a trip to Germany and Angola as the White House seeks to harness momentum from
recent positive economic data. Biden is set to announce next week that he’s expanding student debt relief for
public workers, according to a senior White House official who described the plans on the condition of
anonymity. He’s also expected to reveal federal actions as part of his administration’s efforts to replace the
nation’s lead pipes within a decade. - Spirit Airlines shares sink as much as 38% on Friday, hitting a record intraday low
The beleaguered budget carrier’s efforts to restructure its debt and avoid filing for bankruptcy have hit a snag
after months of talks with bondholders failed to result in a deal, according to people with knowledge of the
matter. Months-long negotiations have yet to yield an agreement. Separately, the Wall Street
Journal reported that Spirit and bondholders have held discussions over the terms of a potential bankruptcy
filing. Rival JetBlue Airways, whose failed bid to buy Spirit Airlines was blocked earlier this year, saw shares
rise as much as 12% on Friday. Fellow ultra-discount carrier Frontier, which also attempted to merge with
Spirit, saw shares rise as much as 16%. Adds that profits are years away and the airline faces deadlines well
before then, with a credit-card processor agreement needing a refinancing or extension of its note by Oct. 21. - Rivian Automotive Inc. falls 7% after the manufacturer of electric vehicles cut its production guidance
for the full year, citing a supply crunch that has become more acute in recent weeks and continues
The company also provided 3Q production and delivery amounts, both of which fell short of expectations.
Some analysts flagged concerns about whether the Irvine, California-based company would meet its year
target for gross margin. Still, Rivian reaffirmed its annual delivery outlook of low single digit growth
compared with 2023, which it expects to be in a range of 50,500 to 52,000 vehicles. In the release, Rivian said
it is experiencing a production disruption due to a shortage of a shared component on the R1 and RCV
platforms. This supply shortage impact began in 3Q of this year and has become more acute in recent weeks.
The company expects to produce 47,000 to 49,000 vehicles this year, down from the company’s previous
forecast of 57,000; estimate 55,295 (Bloomberg Consensus). Truist analyst Jordan Levy (hold): The forecast
cut calls the company’s gross margin target into question; While the company made no mention of the target
for positive gross margins by year end, we would now see this as unlikely assuming the shortage doesn’t
improve in the very near-term; Rivian had previously discussed the supplier issue associated with a third
party component in the company’s in-house Enduro motors, however the magnitude of the impact is likely to
surprise investors. - Retail stocks are trading broadly higher Friday after Bureau of Labor Statistics’ figures showed the
unemployment rate unexpectedly declined and wage growth accelerated in September
The report underscores that the economy remains on solid footing with a resilient labor market able to
underpin consumer spending, said Quincy Krosby, chief global strategist for LPL Financial. The S&P Retail
Select Industry Index climbs as much as 3%, the most intraday since Sept. 13, with 70 out of 78 members
gaining. SPSIRE Index has risen more than 6% this year, trailing the S&P 500 Index’s 20% surge. Meanwhile,
US dockworkers agreed to end a three-day strike Thursday, easing potential supply-chain disruptions for
retailers. Abercrombie & Fitch is a notable gainer Friday, with shares jumping as much as 9.1% for the biggest
intraday advance since May 29; Earlier, JPMorgan added the stock to its Positive Catalyst Watch list, touting
momentum at its Hollister and eponymous brands. - DSV gains as much as 9.3% to trade at the highest since January 2022, after the Danish logistics firm
sold €5 billion in shares without resorting to a discount in order to finance its takeover of Deutsche Bahn’s
Schenker
The news was seen as positive by analysts who also noted DSV’s improved profit guidance for 2024. DNB,
Jacob Berg Nielsen (buy): Says investor demand for DSV shares remain high, evidenced by the fact the share
sale reached the upper end of the targeted range; Notes updated guidance eliminates some of the near-term
uncertainties related to the shares, with both news clear positives for shares.
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