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Stocks and crypto flatline ahead of today’s decisive jobs report

December 3, 2021, 10:09 AM UTC

Happy Friday, Bull Sheeters.

We’re closing out the week on uncertain footing. Stocks in Asia and Europe started off strong on Friday, but have since fallen back to trade flat. U.S. futures too are going sideways. There’s likely to be little action until we get the November nonfarm payrolls numbers in a few hours.

The big number to look out for: the consensus is for 550,000 new jobs. Analysts will also be watching closely for any revisions to previous months’ hiring data, and to the wage data. A strong print on the latter could factor into the Federal Reserve’s calculations for tapering and tightening in the year ahead. I explain more in today’s “By the Numbers” roundup.

But first, let’s see what else is moving markets as we close out the trading week.

Markets update

Asia

  • The major Asian exchanges finished the week mixed, with the Nikkei climbing 1% at the close.
  • The battered HSTech index fell a further 1.5% to hit a record low on Friday. A big culprit 👇👇👇
  • Uber-backed Didi Global will delist from U.S. exchanges and head to Hong Kong, the ride-hailing firm has announced. Since its June NYSE IPO, the Chinese firm has gotten all kinds of heat from Chinese regulators, and that’s spooking tech investors.

Europe

  • At the open, the European bourses were solidly higher across the continent, but then slipped. The Stoxx Europe 600 traded largely flat 90 minutes into the trading session. At the moment, the benchmark is up for the week, no small feat after all the volatility.
  • Shares in Nvidia are down 0.8% in pre-market on news that the FTC in the U.S. is suing to block Nvidia’s $40 billion acquisition of British semiconductor designer Arm over competition concerns. Shares of Nvidia are up more than 140% YTD.

U.S.

  • U.S. futures are doing very little ahead of today’s jobs numbers. Despite Thursday’s impressive rally, all three major averages are at risk of finishing the week in the red.
  • Surprise, surprise. Sort of. Congress reached a deal to extend government funding for a whopping 10 more weeks, meaning we won’t have to deal with a looming government shutdown question until [checks calendar] February.
  • Shares in unicorn Grab bombed lower by 21% in its stock market debut yesterday, another bad sign for SPAC investors.

Elsewhere

  • Gold is up, but it’s had a rough week. It trades around $1,770.
  • The dollar is gaining, too.
  • Crude continues to tick up. Brent trades near $72/barrel.
  • Every time I look at the Bitcoin price lately I have this urge to tap the glass to see if the needle is stuck. Anyhow, it’s trading just below $57,000. Flat.

***

By the numbers

550,000

It’s the first Friday of the month, which means we get nonfarm payrolls before the bell. The consensus estimate: 550,000 new jobs were created in November, a typically big month for hires ahead of the Christmas rush. Jobs reports have been anything but predictable lately. The August and September numbers came in well below estimates (but were then revised upwards). That said, Goldman Sachs believes the jobs figure will come in above the estimate. They see 575K new jobs, which would drop the unemployment rate to 4.5%. They also see a rise in hourly earnings, putting it on a year-end rate of a 5.1% increase. But it’s a mixed picture. Job-switchers are the ones seeing the higher wages, and there’s a fairly big gap between the two groups. The data shows that job-switchers are seeing pay that is nearly in line—not quite, but close—with the inflation rate. And you wonder why employers are obsessing about the Great Resignation dilemma.

11,535

The other big issue hanging over the markets today is Omicron. For the moment, we’re still largely in the dark about what to expect from this new variant. Does it carry a more severe disease? Is it more transmissible? Does it evade the defenses we get from vaccines and monoclonal treatments? We may not know the answers for days, or even weeks. In the meantime, the world is watching closely southern Africa, the region where Omicron was first spotted and classified. And the numbers there show a somewhat worrying picture. Yesterday, South Africa reported 11,535 new COVID cases (nobody is saying these are all Omicron cases), a near three-fold increase over the past three days. That surge has been messing with the FX markets, putting pressure on the South African Rand. On cue, economists are dialing back their Q4 outlook for the region. Of course, Omicron is a global matter. Cases are popping up across Europe, and in the United States. Just yesterday, New York City mayor Bill de Blasio warned, “we should assume there is community spread of the variant in our city.”

23

I got an investor note yesterday from Savita Subramanian at BofA Securities in which she reiterated the team’s year-end 2022 target for the S&P 500—so, nearly 13 months hence. The take? They see the benchmark S&P closing at 4,600. That would be a mere 23 points, or 0.5%, higher than yesterday’s close. Why so bearish? They see Fed tightening and a potential Omicron risk as headwinds for stocks next year.

***

Have a lovely weekend. But first, there’s more news below.

***

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

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As in the Future 50, a stock index created by Fortune and BCG that includes global firms with impeccable long-term growth prospects—companies like Workday, ServiceNow, Veeva, and Coupa. Martin Reeves and David Zuluaga Martínez of the BCG Henderson Institute explain what goes into the Future 50, and, just as importantly, how the index performed in 2021.

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