Upcoming Payrolls Report and Apple Earnings

U.S. futures showed mixed signals on Friday as investors braced for an important payrolls report while also analyzing the financial results from tech giant Apple. Meanwhile, Sam Bankman-Fried, the founder of FTX, was found guilty of diverting billions from customers, marking a dramatic fall from grace for someone who was once a prominent figure in the cryptocurrency sector.

1. Futures Mixed Ahead of Jobs Report

U.S. stock futures fluctuated on Friday as traders awaited the release of a key labor market report and processed Apple’s earnings.

As of 05:56 ET, the Dow Jones futures were virtually unchanged, the S&P 500 futures fell by 8 points or 0.2%, and the Nasdaq futures decreased by 54 points or 0.4%.

These changes followed a strong performance on Wall Street earlier in the week, spurred by the Federal Reserve’s choice to maintain interest rates for the second consecutive meeting. Similar actions by policymakers in both the Bank of England and Norway raised hopes that an extensive period of monetary tightening may be concluding, further boosting the stock market.

The Dow climbed 1.7%, while the S&P 500 and Nasdaq rose by 1.9% and 1.8%, respectively. U.S. government bonds also saw a rally, recovering from recent sell-offs, with prices increasing as yields declined.

2. Anticipating Payroll Data

Attention has now shifted to the anticipated payroll data for October, which is set to be released later in the day.

Economists expect the U.S. economy to have added 180,000 jobs last month, down from 336,000 in September. The unemployment rate is projected to hold steady at 3.8%, while wages are anticipated to rise by 0.3% month-over-month in October, an improvement over September’s 0.2% increase.

Traders will be closely monitoring the report for evidence of resilience in the labor market, as a robust trend could provide the Fed with more flexibility to raise interest rates in the future.

During a news conference on Wednesday, Fed Chair Jerome Powell indicated that further policy rate increases were possible, but emphasized the need for cautious interpretation amid various uncertainties affecting the U.S. economy.

3. Apple’s Outlook Raises Concerns

Apple’s shares declined in premarket trading, driven by ongoing concerns regarding the tech company’s projections for the current quarter.

The California-based firm has indicated that revenue for its December quarter—typically one of its largest due to holiday shopping—will mirror last year’s figures. However, the shorter quarter, which is one week less, is expected to reduce sales by 7%.

In the September quarter, Apple experienced a 2.5% drop in revenue from its vital Chinese market, reflecting intensifying competition and geopolitical tensions. Huawei launched a new high-end smartphone during this time, and reports emerged that Chinese government employees were advised against using Apple’s flagship iPhone.

Despite the challenges, Apple executives asserted that the company gained market share in China, with the Chief Financial Officer stating that the top four selling phones in the country were iPhones.

Overall, sales for Apple’s fiscal fourth quarter fell just under 1% to $89.5 billion, marking the fourth consecutive quarter of decline, though it surpassed estimates of $89.31 billion. Earnings per share of $1.46 also exceeded expectations.

4. Sam Bankman-Fried Found Guilty

Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, was convicted of stealing billions from customers by a New York jury on Thursday.

The verdict, reached after just five hours of deliberation, could result in Bankman-Fried, 31, facing decades in prison. He faced seven charges, including wire fraud and money laundering. Sentencing has been scheduled for March 28, 2024.

After the verdict, U.S. prosecutors celebrated, stating that Bankman-Fried’s fraud was an attempt to establish himself as the "king of crypto." They remarked that, despite the crypto industry’s youth, such corruption is a timeless issue.

Bankman-Fried’s attorney acknowledged respect for the jury’s decision while pledging to continue fighting the charges vigorously.

5. Oil Prices on Track for a Losing Week

Oil prices on Friday were headed toward a second consecutive week of losses, even after a significant jump in prices during the previous session, as traders grew more confident that the Fed’s cycle of interest rate hikes was concluding.

At 05:56 ET, crude futures were down by 0.1% at $82.36 per barrel, while Brent crude slipped by 0.2% to $86.72 per barrel.

Despite climbing more than $2 per barrel on Thursday, both benchmarks were on track to lose over 3% for the week, aided by a lack of escalation in the Israel-Hamas conflict, which alleviated supply disruption concerns in the oil-rich region. Additionally, recent data from China highlighted uncertainties regarding demand from the world’s largest oil importer.