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U.S. Stock Futures Slip as Markets Await Jobs Report Amid Economic Concerns

U.S. stock futures saw a decline before the release of the highly anticipated official jobs report for the month. By 06:35 ET (11:35 GMT), Dow Futures were down 105 points (0.3%), S&P 500 Futures dropped 15 points (0.3%), and Nasdaq 100 Futures fell 65 points (0.4%).

The major indices had a rough start to the year, reversing some of the strong gains from the end of 2023 and heading to break their nine-week winning streaks. The Dow Jones Industrial Average was expected to end the week 0.7% lower, the S&P 500 down 1.7%, and the Nasdaq Composite set for a substantial 3.3% decline.

Investor confidence shifted as signs of economic strength, especially in the labor market, lowered expectations of early Federal Reserve rate cuts. Recent data indicated robust hiring in December, surpassing forecasts, while job openings dropped to a nearly three-year low.

The upcoming monthly jobs report holds greater significance due to these strong numbers, influencing short-term risk sentiment. Economists predicted a rise of 170,000 nonfarm payrolls for the previous month (down from 199,000 in November), a 0.3% monthly increase in average hourly earnings (slightly slower than the previous 0.4%), and an unemployment rate of 3.8% (up from 3.7%).

In corporate news, attention turned to Apple after Foxconn, a major assembler of its flagship iPhone, predicted a year-on-year revenue decline for the first quarter due to weaker demand. Meanwhile, Tesla initiated a recall of 1.62 million vehicles in China, extending its recalls from December in the United States.

Oil prices edged up amid Middle East tensions, with U.S. crude futures at $72.63 a barrel (up 0.6%) and Brent at $77.88 a barrel (up 0.4%). Despite concerns about supply disruptions related to Yemen’s Iran-backed Houthis, both benchmarks were set to close the first week of the year around 1% higher. However, a significant build in U.S. oil product inventories suggested weak demand from the largest fuel consumer globally, capping gains.

Additionally, gold futures traded 0.2% lower at $2,045.65/oz, and the EUR/USD pair traded 0.3% lower at 1.0913.

What’s Moving Markets

Stock futures in New York dip as investors await the vital U.S. December jobs report. Projections suggest a slight decline in job additions compared to November. Despite robust recent hiring, concerns linger about the labor market’s resilience amid the Fed’s efforts for a ‘soft landing’ strategy to tackle inflation without crashing the economy.

  1. Job Expectations: Economists estimate a 170,000 increase in nonfarm payrolls for December, slightly down from November’s 199,000. Average hourly earnings are projected to rise by 0.3%, slightly slower than the prior month. Unemployment might nudge up to 3.8% from 3.7%.
  2. Market Movement: Futures for Dow, S&P, and Nasdaq drop by 0.2% to 0.3%. Recent market sessions saw S&P down by 0.3% and Nasdaq by 0.6%, while the Dow held a slight 0.03% gain, driven partly by strong financial stocks.
  3. Gold & Dollar: Gold prices slip below key levels this week, down 0.3% to $2,037.79 per ounce in European trade. The dollar gains momentum, dampening hopes for imminent Fed rate cuts.
  4. Oil Prices: Oil climbs 1% as Middle East tensions stir supply disruption fears. U.S. crude reaches $72.92 a barrel, while Brent hits $78.19, ending the week 1% higher despite increased U.S. oil product inventories signaling weak demand.
  5. Apple Supplier’s Warning: Foxconn warns of a drop in Q1 revenue due to weakened demand, particularly for iPhones, impacting Apple’s shares despite its position as the world’s most valuable company.

Perplexity AI Secures $73.6M Investment Led by IVP, Backed by Nvidia and Jeff Bezos for Advanced AI Search Tools

In a bid to challenge industry titans, San Francisco-based startup Perplexity AI has secured a substantial $73.6 million investment from a consortium of investors, including tech giants Nvidia and Amazon founder Jeff Bezos. This funding round, spearheaded by venture capital firm IVP, pegs the company’s valuation at approximately $520 million.

Perplexity AI specializes in cutting-edge search tools designed to provide instant, well-cited answers to user queries. Its arsenal comprises various large language models (LLMs) like OpenAI and Meta’s open-source model Llama, enabling comprehensive information synthesis.

The company’s prior success includes servicing over 500 million queries in 2023, a feat achieved with minimal marketing expenditure. With expansion in mind, Perplexity plans to utilize the funding to augment its workforce, intending to grow from its current 38 employees to around 60 by year-end.

Investing on a Friday is like deciding to bake a cake when your friends are already full from a feast. You’re excited about the sweet rewards, but the market seems as unpredictable as your baking skills after a few glasses of wine. It’s like attempting to play the stock market on ‘hard mode’ while everyone else is mentally clocked out for the weekend. Your investments might just end up as wild as your Friday night plans, leaving you wondering if you should’ve just stuck with ordering pizza and Netflix. But hey, sometimes the most unexpected Fridays bring the tastiest surprises – in both investments and homemade cakes!