Oil production in Azerbaijan
Vostok | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Weak quarterly kickoff
Japan markets led losses in Asia on Friday, tracking a Wall Street sell-off ahead of a crucial jobs report, as yet another U.S. Federal Reserve official cooled expectations this week for imminent rate cuts. The Nikkei 225 was down more than 2%, while Korea’s Kospi shed 1%. Hong Kong’s Hang Seng Index edged up 0.1%., while mainland China markets remain shut for a public holiday. Oil prices climbed, with West Texas Intermediate crude for May delivery breaking above $86 per barrel and Brent for June delivery hitting $90.65 per barrel, their respective highest levels since Oct. 20. The Dow Jones Industrial Average closed down Thursday 1.35% at 38,596.98 in its biggest loss since March 2023 and fourth-straight daily loss.
Jobs report preview
Economists expect the U.S. March nonfarm payrolls, due Friday morning, to come in at 200,000, according to the Dow Jones consensus forecast. That would be weaker than February’s initial 275,000, but still indicative of a solid hiring pace. Investors will likely focus on any other information pointing to weakening foundations in the labor market, scouring for clues on whether the U.S. Federal Reserve will hold off cutting rates.
Yellen in China
U.S. Treasury Secretary Janet Yellen kicked off her first full day of official meetings in China, discussing overcapacity concerns and encouraging Chinese officials to pursue market-oriented reforms. “Overcapacity isn’t a new problem, but it has intensified, and we’re seeing emerging risks in new sectors,” Yellen said in prepared remarks at an American Chamber of Commerce in China event in Guangzhou.
Chips ahoy
Samsung Electronics on Friday said it expects to post an eye-popping 931% increase in first quarter operating profit as chip prices rebound. The profit guidance for 6.6 trillion Korean won ($4.89 billion) exceeded even LSEG’s estimate of 5.24 trillion won.
Tech layoffs, again
Apple is laying off 614 workers in California, according to a new state filing, in the company’s first significant round of job cuts since the pandemic. Apple hasn’t been forced into layoffs on the scale of its tech rivals largely because it didn’t expand as aggressively during the Covid-19 pandemic. While the filing didn’t specify the part of the business where Apple is planning to cut numbers, this announcement comes weeks after it canceled a long-running project to build an electric, self-driving car.
[PRO] Pre-earnings upgrades
Analysts have become more bullish on six stocks from around the world this week, raising their price targets ahead of the quarterly earnings release season.
The bottom line
Some of the usual safe haven suspects have been suspiciously popular this week.
Gold prices scaled new highs this week. Even the beleaguered Japanese yen got a rare reprieve, rallying Thursday from levels against the dollar that many worry may spark government intervention.
Rising geopolitical tensions in the Middle East have been cited, as oil prices surged to their highest in more than five months.
Israel is reportedly bracing for retaliatory attacks after a presumed Israeli air strike on Iran’s embassy compound in Damascus killed several Iranian generals.
All of this as U.S. stock markets — which have been a standout outperformer in the past 12 months —have corrected this week in a feeble start to the second quarter.
Successive comments from U.S. Federal Reserve officials this week have also tempered hopes of a a first rate cut, which markets are expecting to happen at the Fed’s June meeting.
With the CBOE Market Volatility index touching its highest since late last year, some investors are appearing to hedge their positions in anticipation of more volatility ahead.
The risk off sentiment is unmistakable.