Stock futures rise ahead of July jobs report

Elon Musk thinks we have passed the peak of inflation

Elon Musk said he thinks we are past the peak of inflation and predicts a mild recession 18 months ahead.

Musk’s comments came at Tesla’s 2022 shareholder meeting, held on August 4.

“We get a little bit of information about where the prices of things go over time because when you’re making millions of cars, you have to buy basic goods many months before they’re needed,” he said.

—Carmen Reinicke

Amazon to acquire iRobot in $1.7 billion deal

Amazon will acquire iRobot for $61.00 per share, the consumer robot company announced Friday. The all-cash transaction is valued at approximately $1.7 billion, including iRobot’s net debt.

iRobot stock stopped on the news. The sale price of $61 per share is a 22% premium to Thursday’s close of $49.99. Amazon shares rose 0.2% in premarket trading.

—By Michelle Fox

DoorDash surges after record orders

A Doordash delivery man rides his bike in the rain during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., November 13, 2020.

Carlos Allegri | Reuters

DoorDash shares rose more than 10% in premarket trading on Friday after the company reported quarterly results that beat expectations after the market closed on Thursday. The food delivery service said orders grew 23% in the last quarter of the year and revenue rose 30%.

The company expects softer consumer spending in the second half of the year, it said.

—Carmen Reinicke

Oil set for heavy weekly losses

Oil prices were moderately lower during Friday morning trading on Wall Street and on track for steep weekly losses. Concerns about a slowdown in demand have pushed prices down in recent sessions.

Futures for West Texas Intermediate crude, the US oil benchmark, are down 10.5% for the week, while international benchmark Brent crude is down 14.5%.

—Pippa Stevens

Bitcoin, Ether on track for worst week since July 1

Cryptocurrencies have plunged this week after a rocky start to the month. Bitcoin and Ether are down around 3% week to date and are on track to post their first negative week in five.

The performance would also be the worst weekly drop since July 1, when Bitcoin lost 8.71% and Ether lost 13%.

—Carmen Reinicke

Warner Bros. sinks

Leslie Grace attends the Warner Bros. Premiere of “The Suicide Squad” at The Landmark Westwood on August 2, 2021 in Los Angeles, California.

Axelle/bauer-griffin | Cinematic Magic | fake images

Stifel raises S&P 500 second-half target

Stifel’s Barry Bannister raised his S&P 500 second-half target to 4,400 from 4,200, saying he still favors cyclical growth stocks in sectors such as software and media.

Here are two reasons Bannister gave for his target hit:

  • The “S&P 500 sell-off in the first half of 2022 is still reversing.”
  • “The S&P 500 also discounts the negative year-over-year S&P 500 EPS in 2022, but we see 2022 EPS holding firm.”

Bannister’s new target implies a 6% rise from Thursday’s close.

fred imbert

European stocks stall ahead of key US jobs report.

European markets were flat on Friday morning as investors followed corporate earnings and awaited the key US jobs report.

The pan-European Stoxx 600 was little changed in early trading. Autos gained 0.8%, while insurance stocks fell 0.8%.

Earnings continue to drive individual stock price movement in Europe. Allianz, Deutsche Post, the London Stock Exchange Group and WPP were among the companies reporting before the bell on Friday.

-Elliot Smith

Asian markets brush off fears over military tensions over Taiwan

Markets in the Asia-Pacific rose on Friday as investors shrugged off fears over China’s military exercises near Taiwan, which follow US House Speaker Nancy Pelosi’s visit to the autonomous island this week.

MSCI’s broader index of Asia-Pacific shares outside of Japan rose 0.74%. Mainland China’s Shanghai Composite gained 0.28% and the Shenzhen Component rose 0.64%.

The Taiex in Taiwan jumped more than 2%, with chipmaker TSMC rising 2.8%.

A lower number of jobs does not mean a weaker economy, says an investor

If Friday’s jobs report shows the US economy added fewer workers in July than the previous month, it’s not necessarily a sign of economic weakness, according to Brad McMillan, CIO of Commonwealth Financial Network.

“If we see a reduction in hiring, even in the number expected, it seems much more likely to be due to a shortage of workers, rather than a sudden impact on labor demand,” McMillan said in a note. “With strong demand, what matters here is the availability of labor.”

—YunLi

Some on Wall Street don’t think the comeback rally can be sustained

The Fed’s commitment to curb inflation and ease recession fears has sparked a relief rally in the market. The S&P 500 is now 14.2% above its 52-week intraday low of 3,636.87 from June 17. The benchmark is also coming off its best month since November 2020, gaining more than 9% in July.

However, some on Wall Street are skeptical that the rally can be sustained for much longer. Max Kettner, chief multi-asset strategist at HSBC Bank, said the comeback is “wishful thinking” and he would need to see further price repricing of rate hike expectations and another sharp drop in real yields to believe it.

Widely followed Morgan Stanley’s Mike Wilson also called this rally short-lived as corporate profits are starting to deteriorate.

Consumer discretionary leading gains, energy lagged most this week so far

Six of the 11 S&P 500 sectors were in the green week to date, led by consumer discretionary, which is up 2.9%.

The most negative sector this week has been energy, which has fallen more than 8% and is on track for its worst week since June 17. The drop in energy names came amid a drop in oil prices. WTI is down more than 10% this week, on pace for its worst week since April.

—YunLi

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