Five things you need to know before the market opens on Monday November 28:
1. — Stock Futures Slide As China Protests Rattle Markets
U.S. equity futures moved lower Monday as global investors reacted to a series of weekend protests in China over the country’s Covid policies and braced for a key week of data releases on jobs and inflation that could define the Federal Reserve‘s near-term rate path.
Hundreds of demonstrators clashed with police in Shanghai yesterday, with protests also breaking out in the capital city of Beijing, as anger over the country’s strict lock-down policies, which are approaching their third year, boiled over following a deadly apartment fire in the city of Urumqi.
The unrest added another layer of uncertainty to global markets, already grappling with recession and inflation risks, and looks to dominate headlines from overnight trading heading into the final weeks of the year.
The region-wide MSCI ex-Japan benchmark fell 1.1% into the final hours of trading, while stocks in China were marked around 1.5% lower by the close of the session. In Europe, the Stoxx 600 was down 0.95% while Britain’s FTSE 100 fell 0.63% in London.
Oil prices were also firmly in retreat, as investors bet on an extended slump in demand from China as its anti-Covid protests continue to disrupt manufacturing and supply chains.
Brent crude contracts for January deliver, the global pricing benchmark, fell $2.582 in overnight trading to $80.81 per barrel while WTI futures for the same month were marked $2.50 lower at $73.78 per barrel.
Benchmark 10-year Treasury note yields fell to a multi-week low of $3.657 as investors found their way into defensive assets, while the U.S. dollar index was marked 0.3% lower against a basket of its global peers at 105.632.
On Wall Street, where traders are looking for a solid end-of-year rally in December, traditionally the best month of the year for U.S. stocks with an average gain of 1.6% for the S&P 500, futures tied to the benchmark are indicating a 36 point opening bell decline
Futures linked to the Dow Jones Industrial Average are indicating a 213 point pullback while the tech-heavy Nasdaq is priced for a 130 point slide.
2. — Week Ahead: Jobs, Inflation, Powell In Focus
Employment data is likely to take center-stage this week as investors sift through a series of releases that could either challenge or support the Federal Reserve’s cautious inflation optimism.
Friday’s November jobs report, which is expected to show a net new 200,000 positions added over the month of November, will be closely studied for any evidence of declining wage growth, which the Fed sees as crucial to its forecasts for slowing inflation over the coming year. Analysts expect average hourly earnings to ease modestly from October, while still rising at an annualized rate of 4.6%.
The Commerce Department’s JOLTs report for the month of October, set for release at 10:00 am Eastern time on Wednesday, could shed light on the nature of unfilled positions — which add to upward pressure on wages — following a bigger-than-expected September tally of 10.71 million.
Fed Chair Jerome Powell is also scheduled to speak on the job market at event in Washington hosted by the Brookings Institution on Wednesday.
A key inflation reading on Thursday will also be in focus with the release of the Fed’s preferred gauge — the PCE Price index — for the month of October. The 8:30 am release is expected to show core prices moderating to 0.3%, with a year-on-year reading of 5.3%.
A light corporate earnings calendar will be highlighted by updates from HPE (HPE) – Get Free Report on Tuesday, Salesforce (CRM) – Get Free Report on Wednesday and merger-target Kroger (KR) – Get Free Report on Thursday.
3. — Apple Extends Slide As China iPhone Hub Hit By More Disruption
Apple (AAPL) – Get Free Report shares extended declines in pre-market trading amid reports that the tech giant could see a 6 million shortfall in iPhone production from disruptions at its key China manufacturing plant.
The Zhengzhou-based complex, which saw violent protests last week as workers demonstrated against pay and working conditions in the 200,000-person plant run by Taiwan’s Foxconn, continues to suffer from both a shortage of workers and strict conditions on movement and travel in around the city.
Bloomberg reported Sunday that the turmoil could lop around 6 million Phone 14 Pro and Pro Max devices from production runs heading into the key holiday season.
Apple shares were marked 1.6% lower in pre-market trading to indicate an opening bell price of $145.74 each.
4. — Fox Retreats As Major Shareholder Pushes Back on News Corp Tie-Up
Fox Corp (FOXA) – Get Free Report shares slumped lower in pre-market trading amid reports that a major investor is pushing back against plans by Rupert Murdoch to re-combine the broadcast group with his News Corp (NWSA) – Get Free Report print division.
The New York Times reported that T. Rowe Price — the largest shareholder in the print division behind the Murdoch family — thinks the deal would undervalue News Corp. and wanted to make its objections public before any formal proposal is made.
Murdoch, 91, who along with his son Lachlan has effective control over Fox, said via a company statement in October that the two media group have formed ‘special committees’ to “thoroughly evaluate a potential combination”, but said no deal could be assumed and provided no time frame for a decision.
The all-stock deal would require a majority vote of the minority shareholders of both News Corp and Fox, with the Murdoch family controlling around 39% of the former and 42% of the latter.
Fox shares were marked 3% lower in pre-market trading to indicate an opening bell price of $30.35 each. News Corp. shares were down 1.26% at $18.07 each.
Cyber Monday sales are expected to top $11 billion this year, according to forecasts from Adobe Analytics, capping a solid, but by no means spectacular Black Friday holiday weekend.
Online and mobile sales formed a big part of the weekend’s shopping surge, Adobe noted, with a record 48% of Black Friday sales coming from smartphone orders. Shoppers spent a record $5.3 billion on Thursday, adding a further $9 billion in online sales over the weekend, the group estimated.
Brick-and-mortar traffic, meanwhile, was up nearly 3% from last year, according to data from Sensormatic Solutions, following forecasts from the National Retail Federation that some 166.3 million people would visit U.S. stores between Thanksgiving Day and Cyber Monday.
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