Stocks could get another boost from the US jobs machine
Posted February 7, 2020 7:34 a.m. EST
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How strong was America's economy heading into the coronavirus shock? The US jobs report from January, out Friday, will provide some hard evidence.
Economists polled by Reuters on average expect that the US economy added a respectable 160,000 jobs last month. The unemployment rate is thought to have held steady at 3.5%.
Goldman Sachs economists are even more optimistic: They predict that 190,000 jobs were added in January, pointing to an unseasonably dry month in parts of the country and better-than-expected private sector employment numbers from ADP, the payroll processor.
Normally, a solid jobs report would cause investors to worry that the Federal Reserve might start to think about raising interest rates again, since inflation could tick up. This time, however, that's less likely, especially due to ongoing concerns about the coronavirus epidemic and the impact on global economic growth.
"While a strong labor market would normally stoke fears of a tighter Fed, there is widespread agreement that [Chair Jerome] Powell and [company] will not be raising rates anytime soon," Paul Hickey of Bespoke Investment Group told clients. "Eventually, that will change, but until it does, the market is reacting positively to positive economic news."
Investor insight: The Dow, S&P 500 and Nasdaq all finished at all-time highs on Thursday. They've lost some steam in premarket trading, but could get a boost from good news on jobs.
Good context: An increase of 160,000 jobs would mark an improvement over December, when the US economy added a disappointing 145,000 jobs. But it remains below the three-month average of 184,000 and the six-month average of 189,000, Nicholas Colas, co-founder of DataTrek Research, notes.
Credit Suisse CEO resigns after spying scandal
This just in: Credit Suisse CEO Tidjane Thiam has resigned after acknowledging that two spying scandals last year had "disturbed" the Swiss bank.
The board of directors unanimously accepted Thiam's resignation at a meeting on Thursday, appointing Credit Suisse veteran Thomas Gottstein as the new CEO. The shakeup will take place after Credit Suisse reports its fourth quarter and 2019 results next week.
Catch up: Last year, Credit Suisse's ex-chief operating officer, Pierre-Olivier Bouée, was implicated in two separate spying operations, one involving the former head of wealth management Iqbal Khan. Khan had left Credit Suisse for crosstown rival UBS.
Bouée stepped down after that operation came to light. More recently, he was blamed for ordering a spying operation on Credit Suisse's former head of human resources last February.
"I had no knowledge of the observation of two former colleagues," Thiam said in the statement. "It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place."
Shares in Switzerland fell more than 3% in early trading. In a note, UBS analyst Daniele Brupbacher said the bank doesn't foresee changes to Credit Suisse's main strategy — shifting focus away from investment banking in London and New York toward wealth management and the Asia region — "any time soon."
'Growth at all costs' is over at Uber
Uber's stock is up 6% in premarket trading after CEO Dara Khosrowshahi made a pointed declaration Thursday: "We recognize that the era of growth at all costs is over."
On a conference call with analysts Thursday, Uber executives bumped up their expectation for achieving profitability, excluding certain costs, to the end of this year. It had previously expected to hit that point by 2021.
That will mark a big shift. Losses across 2019 totaled a staggering $8.5 billion. Uber has lost $1 billion or more in each quarter since it went public in May — keeping shares below its $45 IPO price.
In related IPO news: Shares of Casper rose 12.5% on their first day of trading Thursday, closing at $13.50. That's still below the initial price range set by the company, which intended to price shares between $17 and $19 as recently as last week.
AbbVie and Canada Goose report results before US markets open.
Also today: The US jobs report for January, which includes the unemployment rate and wage data, posts at 8:30 a.m. ET.
Coming next week: Investors will be watching the Democratic primary vote in New Hampshire after Pete Buttigieg took a narrow lead in Iowa.