Here are the most important news, trends and analysis that investors need to start their trading day:
1. Stock futures are lower after release of May jobs report
Stock futures were down Friday morning, as Wall Street digested the release of May's better-than-expected jobs report. Treasury yields rose. On Thursday, all three major U.S. stock indexes posted strong gains, snapping two-day losing streaks and putting them in positive territory for the week. The Dow Jones Industrial Average advanced 435 points, or 1.3%, after being down more than 300 points at session lows. The S&P 500 added 1.8%, while the tech-heavy Nasdaq Composite outperformed, rising 2.7%.
The major indexes have not recorded back-to-back positive weeks in about two months, as investors monitor a number of challenges including high inflation and the Federal Reserve's response to it, recession fears and the Russia-Ukraine war. However, stocks have moved solidly off their lows of the year, hit 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. U.S. economy added 390,000 jobs in May
The U.S. economy added 390,000 jobs in May, the Labor Department said Friday, better than the 328,000 estimate from Dow Jones. Although it topped expectations, job growth in May did slow compared with April, when nonfarm payrolls grew by 436,000.The unemployment rate remained at 3.6% in May, the third consecutive month it's been at that level. Average hourly earnings rose 0.3% from April, a tad lower than the 0.4% estimates. On a year-over-year basis, wages rose 5.2% in May. That matched the Dow Jones estimate.
Wall Street was closely anticipating May's jobs data. In particular, investors were looking for any signs of labor market weakness, as the Fed raises interest rates to tamp down hot inflation. The job market has been exceptionally tight in recent months, with the number of vacant positions vastly outnumbering available workers.
3. Tesla shares fall as Musk reportedly wants to cut 10% of jobs
Shares of Tesla dropped nearly 3% in premarket trading Friday, as Reuters reported CEO Elon Musk wants to reduce head count at 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 cut jobs at the company by 10%. The email was sent Thursday and titled "pause all hiring worldwide," Reuters said. Earlier this week, Musk told Tesla employees they need to return to their respective offices at least 40 hours a week or leave the company instead. Tesla has faced Covid-related challenges in China recently, a key market for the EV company, prompting some Wall Street analysts to lower their vehicle delivery estimates.
4. OPEC+ raises oil output faster than expected for July and August
OPEC and its oil-producing allies on Thursday reached a larger-than-expected production increase for July and August. The group, known as OPEC+, will raise output by 648,000 barrels per day in both July and August, as Russia's invasion of Ukraine continues to disrupt the world's energy markets. OPEC+ had initially intended to raise production by 432,000 barrels per day in those two months. Oil prices rose by more than 1% on Thursday, but were slightly lower Friday morning. U.S. benchmark West Texas Intermediate crude traded around $116.20 per barrel, down about 0.6%. International benchmark Brent crude was down about 0.5% at $117 per barrel. Crude prices have soared this year, as Western sanctions on Russian oil have exacerbated existing supply and demand imbalances.
5. Coinbase extends hiring freeze and plans to pull some offers
Coinbase is extending its hiring freeze "for the foreseeable future" and will rescind some existing job offers, the cryptocurrency exchange said Thursday. "After assessing our business priorities, current headcount, and open roles, we have decided to pause hiring for as long as this macro environment requires," an executive wrote in a blog post. Coinbase had been one of the highest-flying tech stocks last year after its public market debut, but its shares are down more than 70% year to date. Investors have rotated away from more speculative growth stocks toward defensive parts of the market. Coinbase also has been hit hard by the drop in cryptocurrency prices this year, leading to a slowdown in its own revenue growth.
On Thursday, Gemini, the crypto exchange founded by longtime bitcoin boosters Cameron and Tyler Winklevoss said it is laying off 10% of its workforce. The digital asset industry has entered a contraction phase known as a "crypto winter," the Winklevoss twins wrote.
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