Here are the most important news, trends, and analysis investors need to start their trading day:
1. Stock futures are lower after the May employment report was released
Traders on the NYSE floor, May 27, 2022.
Source: NYSE
Stock futures fell on Friday morning, when Wall Street digested the May job release release better than expected. Treasury yields increased. On Thursday, the top three U.S. stock indexes posted strong gains, breaking two-day loss streaks and placing them in positive territory during the week. The Dow Jones Industrial Average advanced 435 points, or 1.3%, after falling more than 300 points to session lows. The S&P 500 rose 1.8%, while the high-tech Nasdaq Composite outperformed, rising 2.7%.
Major indices have not seen positive weeks in a row in about two months, as investors follow a series of challenges, such as high inflation and the Federal Reserve’s response, fears of recession and the war between Russia and Ukraine. However, stocks are well ahead of last year’s lows on May 20. The Nasdaq is up 11.6%, while the S&P 500 and Dow are up 9.6% and 8.5%, respectively.
2. The U.S. economy added 390,000 jobs in May
A hiring poster now at TJ Maxx in Annapolis, Maryland, on May 16, 2022.
Jim Watson | AFP | Getty Images
The U.S. economy added 390,000 jobs in May, the Department of Labor said Friday, better than the Dow Jones estimate of 328,000. Although it exceeded expectations, employment growth in May slowed compared to April, when non-farm payrolls grew by 436,000. The unemployment rate remained at 3.6% in May, the third consecutive month at this level. Average hourly earnings rose 0.3% since April, slightly below the 0.4% estimate. Year-on-year, wages rose 5.2% in May. This is in line with the Dow Jones estimate.
Wall Street was expecting close to May employment data. In particular, investors were looking for signs of a weakening labor market as the Fed raises interest rates to curb hot inflation. The labor market has been exceptionally tight in recent months, with a much higher number of vacancies than available workers.
3. Tesla shares are falling as Musk wants to cut jobs by 10%
Tesla CEO Elon Musk is trying to buy Twitter and run several companies at once.
James Glover II | Reuters
Shares of Tesla fell nearly 3% in pre-market trading on Friday as Reuters reported that CEO Elon Musk wants to reduce the number of people in the electric vehicle maker. According to the report, Musk wrote in a brief email to Tesla executives that he has a “super bad feeling” about the economy and wants to reduce jobs in the company by 10%. The email was sent on Thursday with the headline “Pause all hiring worldwide,” Reuters said. Earlier this week, Musk told Tesla employees that they had to return to their respective offices at least 40 hours a week or leave the company. Tesla has recently faced challenges related to Covid-19 in China, a key market for the electric vehicle company, which has led some Wall Street analysts to lower their vehicle delivery estimates.
4. OPEC + increases oil production faster than expected for July and August
Saudi Energy Minister Prince Abdulaziz bin Salman has said that OPEC + will keep politics out of its decision-making process in favor of the “common good” of stabilizing energy prices.
Ian Forsyth | Getty Images News | Getty Images
OPEC and its oil-producing allies reached a larger-than-expected increase in production on Thursday and July and August. The group, known as OPEC +, will increase production by 648,000 barrels a day in both July and August as the Russian invasion of Ukraine continues to disrupt global energy markets. OPEC + had initially planned to increase production by 432,000 barrels per day in these two months. The price of oil rose more than 1% on Thursday, but was slightly lower on Friday morning. West Texas Intermediate crude was trading at around $ 116.20 a barrel, down 0.6%. International benchmark Brent crude fell 0.5% to $ 117 a barrel. Crude oil prices have skyrocketed this year as Western sanctions on Russian oil have exacerbated the imbalances between supply and demand.
5. Coinbase is expanding the contract freeze and plans to remove some offers
Coinbase is expanding its hiring freeze “in the foreseeable future” and will cancel some existing job offers, the cryptocurrency exchange said on Thursday. “After assessing our business priorities, current workforce and open roles, we have decided to stop hiring for as long as this macro environment requires,” an executive wrote in a blog post. Coinbase had been one of the fastest-flying technology stocks last year after its public market debut, but its shares have fallen more than 70% so far. Investors have moved away from the more speculative growth stocks towards defensive market shares. Coinbase has also been hit hard by falling cryptocurrency prices this year, slowing its own revenue growth.
On Thursday, Gemini, the cryptocurrency exchange founded by bitcoin promoters Cameron and Tyler Winklevoss, said it was laying off 10% of its workforce. The digital asset industry has entered a phase of contraction known as the “cryptographic winter,” the Winklevoss twins wrote.
– Join the CNBC Investing Club now to follow all of Jim Cramer’s stock moves. Follow the broadest market share as a professional on CNBC Pro.