MARKET WRAPS
Stocks:
European stocks struggled for direction on Friday ahead of the U.S. monthly jobs data for February.
Jobs growth is expected to be much slower than the bumper rise in January, as investors continue to gauge when the Federal Reserve is likely to start cutting interest rates.
"Unless the data is exceptionally strong, it is unlikely to alter expectations for upcoming Fed rate cuts," IG said.
Shares on the Move
Grifols shares rose 16% after the company published its 2023 accounts with a so-called unqualified opinion from KPMG, suggesting the auditor saw its financial statements as fairly presented.
HelloFresh fell more than 40% after the company dropped its midterm targets as it expects earnings to fall this year due to expansion in its production capacity, investments in new fulfillment centers and high marketing costs.
Stocks to Watch
A.G. Barr is facing limited downside risk and has the opportunity to rebuild its margins following the recent inflationary cycle, Barclays said after raising the rating for the stock to equalweight from underweight. It upgraded the price target to 522 pence from 517 pence.
Novo Nordisk 's investor day did a solid job of conveying the impression that the company is firmly grasping the unique thematic opportunity that lies before it with both hands, Deutsche Bank said, lifting its price target to DKK1,100 from DKK950 and retaining its buy rating.
U.S. Markets:
Stock futures traded mostly higher ahead of the jobs report due at 13:30 GMT.
Analysts in a WSJ poll expect payrolls to rise by 198,000, compared with a 353,000 increase in January.
Stocks to Watch
DocuSign posted better-than-expected revenue in its latest quarter. Shares were up 10% premarket.
Rivian Automotive was rising 2.9% after it unveiled two new, lower-priced SUVs.
Forex:
The euro could rise against the dollar if the U.S. jobs data are on the weak side, Danske Bank Research said.
"If our expectation of a softer U.S. labor market holds true-we forecast non-farm payrolls at 180k alongside average hourly earnings at 0.2% m/m-we could see EUR/USD rise further in the very near term."
In the near term, sterling is expected to remain within the range it has been in so far in 2024, DZ Bank Research said.
The currency was minimally impacted by the 2024-2025 budget, it said.
"The implications for the pound are limited," as the spending and taxation plans outlined will not have a huge effect on economic growth this year, DZ Bank added.
Bank of England rate cuts starting in the summer are still realistic.
"With no significant shift in fiscal policy, nor in the monetary outlook, the pound in the short-term is likely to continue to trade in the ranges that have already been seen this year in GBP/USD and EUR/GBP."
Bonds:
Investors should continue buying German Bunds on dips--when prices fall and yields rise--as interest-rate cuts by the ECB are on their way, Societe Generale Research said.
"Increasingly likely slow rate cuts cycle fits into our view of rates volatility declining further."
MFS Investment Management maintained its constructive view on European duration following the ECB's meeting.
Spreads, meanwhile, remained well supported in the context where policy is expected to gradually return to neutral, but no major negative surprise on the economy is expected, it said.
Energy:
Oil prices were higher after reports that operations at TC Energy's Keystone pipeline were partially suspended on Thursday, restricting a crucial conduit for carrying Canadian crude to the U.S. Midwest and Gulf Coast.
"The company reported that the pipeline is safely operating after a brief suspension, although details on supply disruption are not available yet," ING said.
Oil futures gained support from signs of tightness in physical markets and OPEC+ extending output curbs, as well Red Sea disruptions. Meanwhile, data showed U.S. gasoline inventories fell last week and Chinese crude imports rose on year, pointing to growing demand in the world's top oil consumers.
Metals:
Metal prices rose, with gold boosted by expectations for U.S. rate cuts, geopolitical tensions and China's economic woes.
Investor interest in the precious metal has returned, with the latest Comex data showing money managers adding fresh long positions, reflecting bullish sentiment in the gold market, ING said.
Gold has also been supported by Chinese central bank buying, and the country's domestic market, as buyers flocked to the precious metal amid economic woes there, ING added.
"We expect gold prices to trade higher this year as safe-haven demand continues to be supportive amid geopolitical uncertainty with the ongoing wars and the upcoming U.S. election."
Citi said it remains tactically bullish on copper, iron ore and zinc over the next couple of months despite continued weakness in global soft manufacturing indicators and no meaningful catalysts yet from China's ongoing National People's Congress.
It also turned tactically bullish on palladium last week.
EMEA HEADLINES
German Industrial Production Ticked Up More Than Expected in January
Germany's industrial production expanded more than expected in January, delivering some bright news for the country's creaking industrial model.
Output rose 1.0% compared with the previous month, on a seasonally and calendar-adjusted basis, from a downwardly revised 2.0% decline in December, according to data published Friday by German statistics office Destatis.
AI Is Remaking Legacy Tech Companies. This Stock Could Get a Big Boost.
The emergence of artificial intelligence-building on the continued adoption of cloud computing-has breathed new life into some of the tech sector's oldest players. It's one more example of how AI is changing everything.
IBM, for instance, has been reinvigorated by its WatsonX AI platform; the stock is up 20% this year and more than 50% over the past 12 months. Optimism about the AI makeover at Salesforce has likewise invigorated the cloud software pioneer's shares-they're up 16% this year, and 66% from a year ago.
Hamas Leaves Gaza Talks With No Cease-Fire Deal
CAIRO-Hamas said it was pausing its participation in talks aimed at securing a cease-fire in Gaza, after its leader in the enclave emerged from days of silence to deliver a hardened negotiating position amid signs of increased tension between Israel and the U.S.
Yahya Sinwar, who had been largely disengaged from the talks until recently, is demanding that Israel commit to discuss a permanent stop in the fighting, putting him at odds with other Hamas leaders, according to officials familiar with the discussions.
GLOBAL NEWS
China's Vehicle Sales Dropped in February Amid Price War, Long Holiday
China's vehicle sales fell sharply in February, dragged by weaker demand during the Lunar New Year holiday and an intensifying price war in the world's biggest auto market.
Retail sales of passenger cars in China declined to 1.095 million units, down 21% from a year earlier and 46% from January, the China Passenger Car Association said Friday. The association attributed the sharp decline to lower demand ahead of the Lunar New Year and some consumers bringing forward purchases to the start of the year. Consumers are also holding back after the latest round of price cuts as competition stiffens in China's market, the CPCA said.
Deutsche Bank says the bitcoin rally still has legs. Here's why.
After a record run and subsequent selloff, bitcoin still sits on a five-day near 7% gain, versus a 0.3% rise for the S&P 500. That brings us to a two-part call of the day, the first from Deutsche Bank strategists who say get ready for more bitcoin gains this year.
Strategists Marion Laboure and Cassidy Ainsworth-Grace say continued inflows to bitcoin exchange-traded funds, the looming halving, more regulation and a strong U.S. economic performance are all backstops for crypto gains.
Biden and Trump, in Two Speeches, Speak to Two Visions of America
A resurgent America making steady progress toward a future of shared prosperity.
A dystopian backwater on a path to ruin.
Biden Seeks to Boost Emergency Aid to Gaza With Offshore Pier
WASHINGTON-President Biden said in his State of the Union speech Thursday that the U.S. military will install a temporary pier off the coast of the Gaza Strip for cargo ships to unload food, water and other emergency supplies, boosting the direct American role in addressing the enclave's humanitarian crisis.
Biden directed the military to carry out the emergency project, aiming to ease food shortages and lack of shelter and medical services for Gaza's 2.2 million residents, according to U.S. officials who briefed reporters ahead of Biden's speech Thursday evening. The president has been under pressure to do more to alleviate civilian suffering in Gaza, where the Israeli military is fighting the Hamas militant group.
Write to ina.kreutz@wsj.com
Write to us at newsletters@dowjones.com
We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions.
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
03-08-24 0547ET
