Five things you need to know before the market opens on Friday January 6:
1. -- Stock Futures Mixed As Jobs Data Looms
U.S. equity futures moved in and out of positive territory Friday, while the dollar extended gains against its global peers and Treasury yields nudged higher, as investors braced for a crucial December jobs reports that could cement the Federal Reserve's hawkish tone on near-term rate hikes.
Benchmark 2-year Treasury note yields are trading close to the highest levels in two months, while the dollar has gained more than 1.4% so far this week following the release of minutes from the Fed's December policy meeting that indicated the need for further rate hikes and ADP jobs data Thursday that suggested stronger-than-expected private employment growth.
A hot December jobs reading could accelerate bets on a bigger near-term rate hike from the Fed, particularly if wages are seen to have risen ahead of expectations over the final month of the year.
The CME Group's FedWatch suggests a near 42% chance of a 50 basis point rate hike in February, up from just 27% this time last week, with the odds of the Fed Funds rate topping 5% in May rising to around 46.3%.
Consumer price pressures are starting to ease in other major economies, however, in moves that could be replicated here in the U.S., following data Friday showing a significant pullback in headline inflation in Europe, which slowed to 9.2% in December from the record high print of 10.1% the previous month.
Heading into the start of the trading day, benchmark 10-year Treasury note yields edged 2 basis points higher to 3.733% while 2-year notes were pegged at 4.475% in European trading. The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.34% higher at 105.401.
On Wall Street, futures tied to the S&P 500 are priced for a modest 1 point opening bell dip while those linked to the Dow Jones Industrial Average are set for a 10 point bump. The tech-focused Nasdaq, which is on pace for a fifth consecutive weekly decline, is looking at a 27 point decline.
2. -- Wage Gains In Focus Amid Puzzling Employment Picture
The U.S. economy likely added 200,000 new jobs last month, according to estimates for today's December employment report, with investors focused on the pace of wage gains amid a tight labor market with near record levels of unfilled positions.
Headline forecasts suggest the slowest pace of job gains in more than a year, even with adjustments made for holiday season hiring, in what would typically include softer projections for gains in average hourly earnings.
JOLTs data for the month of November, however, indicated around 10.45 million open positions, a level that could feed in to pay gains over the coming months. December wages are expected to rise 5% from last year, and 0.4% on the month, moderating slightly when compared to November levels of 5.1% and 0.6% respectively.
The headline unemployment rate, meanwhile, is expected to hold at 3.7%
ADP's national employment report showed a stronger-than-expected gain of 235,000 last month, while weekly jobless claims fell to just 204,000 over the period ending on December 31. The Challenger job cuts report for December, however, said layoffs rose 129% from last year to 76,800.
"The labor market was still tight at the end of 2022, but the quality of jobs available to American workers has declined: Tech, finance, and manufacturing employers are laying off workers, while hiring continues in lower-paying industries like leisure and hospitality," said Bill Adams, chief economist for Comerica Bank in Dallas.
3. -- Tesla Extends Slump Following Big Price Cuts In Asia
Tesla (TSLA) shares slumped lower in pre-market trading following reports that the carmaker has extend price cuts in key Asia markets this week, suggesting further demand challenges into the start of the year.
Tesla reduced the starting price of its Model 3 sedan by around 13.5% in China, according to data from its website, and lowered the price of its Model Y by around 10% to 259,900 yuan, the equivalent of around $37,660. Price cuts were also seen in markets in South Korea and Japan as well as Australia.
Tesla delivered a record 405,278 new cars over the three months ending in December, the company said in a statement on Monday, up 31.5% from the same period last year and 18.1% from the 343,000 tally reached over the three months ending in October.
Tesla shares were marked 5.11% lower in pre-market trading to indicate an opening bell price of $104.70 each.
4. -- Samsung Forecasts Weakest Quarterly Profit Since 2014 As Demand Fades
Samsung Electronics, the world's biggest chipmaker and key smartphone rival to Apple (AAPL), will likely post its weakest quarter profit in eight years amid fading consumer and business demand, the group cautioned Friday.
Samsung forecast first quarter profits of around $3.37 billion for the three months ending in December, down 69% from the same period last year and the lowest since 2014. Overall revenues were likely down 9% from last year to around $54.9 billion.
Samsung typically release a preliminary earnings report early in the month after the quarter ends, with a more detailed update following a few weeks later.
Apple will publish its December quarter earnings on January 26, with early estimates indicating a bottom line of $1.98 per share on revenues of $122.7 billion.
Samsung shares were marked 1.37% higher by the close of trading in Seoul, pegged at 59,000 Korean won each. Apple shares were marked 0.14% higher in pre-market trading to indicate an opening bell price of $125.11 each.
5. -- WWE Shares Surge As Vince McMahon Plots Dramatic Return As Chairman
World Wrestling Entertainment (WWE) shares surged higher in pre-market trading after founder Vince McMahon said he would return to the media and entertainment group following his retirement last year following a probe into so-called 'hush money' payments to a former employee.
McMahon will serve as executive chairman of WWE upon his return, the 76 year old said in a statement late Thursday, and steward the group's media rights negotiations while leading its review of strategic alternatives.
McMahon stepped-down from his role as group CEO in July after the Wall Street Journal said he had paid $3 million to a former group paralegal with whom he was having a consensual affair.
WWE shares were marked 9% higher in pre-market trading to indicate an opening bell price of $78.50 each, a move that would value the Stamford, Connecticut-based group at around $5.85 billion.
