Here are five things you must know for Friday, October 7:
1. -- Stock Futures Higher Ahead of Key September Jobs Report
U.S. equity futures were slightly higher on Friday as investors looked ahead to September’s jobs report for further clues into the Federal Reserve’s inflation-fighting rate-tightening campaign.
On Wall Street, futures futures tied to the S&P 500 were indicating a .5-point opening bell gain, while those linked to the Dow Jones Industrial Average were priced for a 45-point increase. Futures tied to the tech-focused Nasdaq were indicating a 25-point move to the downside.
Investors have been on a rollercoaster this week, with Monday and Tuesday marking the best two-day rally for the Dow and S&P 500 since April 2020 before stocks gave up some gains on Wednesday and Thursday.
Friday’s jobs report for September will show whether the Fed’s aggressive series of rate hikes is having an impact on the labor market. Economists are expecting the U.S. economy to have created 275,000 jobs last month, with the unemployment rate holding steady at 3.7% and wage growth staying elevated. The report will be released at 8:30 a.m. ET.
2. -- Musk Gets Reprieve On Getting Twitter Deal Done
A Delaware Chancery Court judge gave Elon Musk a bit more time to close his acquisition of Twitter (TWTR) if he wants to avoid a trial, ruling Thursday that the Tesla CEO has until Oct. 28 to close a deal.
The judge’s decision followed the Tesla (TSLA) CEO's own about-face on buying the social media platform, which Musk revealed on Thursday was back on the table for $54.20 a share – so long as Twitter ends all litigation. Twitter refused to oblige.
In a filing with Delaware’s Court of Chancery on Thursday, Musk’s side said Twitter should drop the court date scheduled for Oct. 17, so that the necessary financing can be pulled together to wrap up the acquisition by Oct. 28.
“Twitter will not take yes for an answer,” the filing says. “Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests.” Musk argued that the trial would distract his team from securing the financing necessary to close the deal.
3. -- Credit Suisse to Buy Back $3 Billion In Bonds
Credit Suisse (CSGKF) said it will spend around $3 billion to buy back senior bonds to save on interest payments as it prepares to reshape itself as a smaller and safer bank.
Credit Suisse said Friday it would repurchase parts of 12 dollar-denominated bonds it issued previously, for up to a total $2 billion. It is also offering to buy back eight euro and sterling bonds it issued, for up to a total of 1 billion euros, equivalent to around $980 million.
Credit Suisse stock and bond prices have fallen in recent weeks as investors anticipate it could raise new shares to fund its restructuring. An online frenzy also sparked concerns about the bank's financial health.
The bond buyback could be seen as a proactive move by the bank to show markets that it has financial firepower at its disposal. Buying back debt extinguishes the interest payments the bank owes bondholders and saves the bank money by buying back the debt at a discount.
4. -- Tik Tok Operating Losses More Than Triple
TikTok parent ByteDance Ltd. saw its operating losses more than triple last year to above $7 billion as it spent heavily to continue its torrid growth, The Wall Street Journal reported Friday, though operating profit did turn a corner in the first quarter of 2022.
Revenue reached nearly $18.3 billion for the first three months of 2022, up almost 54% compared to a year prior, according to the Journal. ByteDance showed it was beginning to rein in its expenses, with a net loss for the period coming in at $4.7 billion, down nearly 84% from $29.1 billion a year earlier.
The report shows a company rapidly increasing its revenues, accumulating a massive war chest of cash and other investments, but with net results weighed down by tens of billions of dollars in unrealized market losses on convertible securities, the Journal said.
At the same time, the reduction in net losses in the first quarter of 2022 could reflect ByteDance readjusting its valuation as Chinese internet companies have been hit by the government’s crackdown on the tech industry, the Journal said.
5. -- U.S. Weighs Response to OPEC Production Cuts
The U.S. government is considering its options in response to OPEC’s decision this week to slash oil production, including measures aimed at breaking the cartel’s hold on markets or limiting U.S. oil exports should shortages emerge.
This week’s OPEC decision to cut oil production by 2 million barrels a day threatens to push prices higher again just weeks before the Nov. 8 midterm elections.
President Joe Biden and lawmakers have raised the prospect of retaliatory action against OPEC and Saudi Arabia, its largest producer, while Congressional leaders are threatening legislation that would charge OPEC members in front of the World Trade Organization or subject them to U.S. antitrust law.
“There are a lot of alternatives, and we haven’t made up our minds yet,” Mr. Biden said to reporters Thursday outside the White House.
