Hiring downturn sets stage for easing 04/09/2025

HOT stories for today

US market wrap:

• Markets rallied on Wednesday, kick-starting what had looked like a sluggish September after Google’s court win jolted the sector higher. The S&P 500 and Nasdaq Composite, both tech-heavy, rose 0.51% and 1.03%, while the blue-chip Dow, more tied to the real economy, slipped 0.05%. Gold set another record, and Bitcoin extended its rebound after nearly dipping below $107k over the weekend.
• Earnings showed consumers resilient but trimming small purchases, while software firms fell short of lofty expectations. The Fed’s Beige Book reported that overall activity remained little changed since July, with spending remaining flat or slipping, wage growth lagging behind inflation, and tariffs fueling uncertainty. Labor markets cooled, with many districts struggling to find immigrant workers. Some companies passed tariff costs to buyers, others held prices steady, but all reported tariffs driving inflation. Meanwhile, Trump asked the Supreme Court to fast-track his tariff appeal.

Soft labor market pressures the Fed

• August’s jobs report isn’t expected to be historic, but another weak hiring gain would all but guarantee a Fed rate cut this month, with more possibly to follow. Economists forecast just 75,000 new jobs and unemployment edging up to 4.3%, a near four-year high. The Fed has already shifted its focus from inflation to employment after July’s report showed the weakest three-month hiring streak since 2010, with downward revisions revealing almost no jobs were created in May and June.
• That shock spurred Trump to oust the head of the statistical agency in a rare move. Now 96% of investors expect a September cut. Inflation has risen to 2.7% but is seen as tariff-driven and temporary, giving the Fed cover to prioritize jobs. Signs of strain are clear: slower hiring, fewer openings, nearly 2 million on unemployment rolls, and longer job searches. Even a strong August report likely wouldn’t stop the Fed. Economists say it would be discounted after recent revisions, although it could temper the rate of reduction.

Stocks on the move:

• Figma (FIG): Shares fell 11% after its first report as a public company. Revenue rose 41% year over year, but results were flat per share. Fiscal 2025 sales are projected at $1.02–$1.03B vs. $1.01B expected.
• American Eagle Outfitters (AEO): The stock surged 24% postmarket after beating Q2 estimates, helped by a Sydney Sweeney campaign it called its best ever. Earnings came in at $0.45 per share on $1.28B revenue, topping forecasts for $0.21 on $1.24B.
• Salesforce (CRM) Shares dropped 4% as Q3 revenue guidance of $10.24–$10.29B fell slightly below consensus. Q2 results topped expectations with EPS of $2.91 on $10.24B vs. $2.78 on $10.14B expected.
• C3.ai (AI): Stock slid 11% after a wider-than-expected Q1 loss and soft revenue. The company withdrew full-year guidance, named a new CEO, and reorganized sales and services.

Watchlist: GOOG, AAPL, FIG, AEO, CRM, AI, ASAN, CIEN, NVDA

Today’s action

• Asia-Pacific stocks mostly advanced Thursday after a Wall Street tech rally boosted the S&P 500 and Nasdaq Composite, though lingering economic worries kept gains in check. Japan’s Nikkei 225 climbed 1.56%, driven by domestic tech names, with SoftBank Group up more than 6%. In contrast, Hong Kong’s Hang Seng slipped 1.21%. 
• U.S. equity futures were little changed overnight: Dow futures dipped 60 points (-0.13%), S&P 500 futures were flat, and Nasdaq 100 futures edged down 0.01%. Investors await Thursday’s ADP private payrolls report, expected to confirm softer labor-market momentum.

Bitcoin

• Bitcoin extended its rebound on Wednesday, briefly touching $112,500 after Wall Street’s open as traders turned more optimistic. The move liquidated short positions and marked a key resistance retest, with BTC maintaining its “bull market support channel.”
• Analysts highlighted Bitcoin’s growing role as a macro hedge, especially with expectations of a Fed rate cut ahead. Gold also hit fresh record highs, reinforcing the safe-haven trade. Bitcoin last traded near $110,661.
  Watchlist: Bitcoin: 99 000-125 000, Ethereum: 4000-4980, Solana: 160-214
   

Forex

• The euro gained 0.37% to 1.1679 after the US Dollar Index slipped 0.25% to 98.06. A weak JOLTS report showing falling vacancies and rising layoffs fueled Fed rate cut bets, lifting EUR/USD after Tuesday’s drop below key moving averages. Eurozone Services PMI missed at 50.5, while softer producer prices kept the ECB’s outlook dovish.
• The pair tested higher midweek but struggled to clear resistance at the 200-day EMA near 148.22, holding around the 148 handle after briefly touching 149.14. Dollar flows remain driven by risk sentiment and expectations of the Fed, with traders awaiting Thursday’s ADP data and Friday’s pivotal NFP report.
  Watchlist: EUR/USD: 1.0700-1.1700, USD/JPY: 140-151

Basic Materials

• West Texas Intermediate edged down to about $65.50 in early Asian trade Thursday. Prices fell after reports that OPEC+ may discuss raising output this weekend, stoking oversupply concerns. An unexpected crude stock build in the latest API data added pressure.
• XAU/USD jumped over 1% Wednesday, clearing the midpoint of the $3,500–$3,600 range and eyeing new all-time highs. Weak US labor data from the JOLTS report and only modest factory order growth boosted safe-haven demand, though overbought signals suggest near-term consolidation. Fed officials struck mixed notes, with Kashkari, Bostic, and Musalem still highlighting inflation risks.
  Watchlist: GOLD: 2600-3650, US Oil: 55.60-75.80

Key Economic Events Today:

EST time

08:15 am: USD ADP Non-Farm Employment Change
08:30 am: USD Unemployment Claims, Trade Balance
09:45 am: USD Final Services PMI
10:00 am: USD ISM Services PMI
12:05 pm: USD FOMC Member Williams Speaks
07:00 pm: USD FOMC Member Goolsbee Speaks


Earnings

BMO (Before Market Open):

CIEN                Ciena Corp.
TTC                  Toro Company
AMC (After Market Close): AVGO, LULU, IOT, DOCU

 

The TEFS Analyst team wishes you a successful day!