U.S. Nonfarm Payrolls Higher at 263K vs. Consensus 255K

It’s finally the U.S. jobs day. The median estimate in the Bloomberg survey is for a gain of 255K in September non-farm payrolls (the actual number was just released at 263K, above estimates), a slower pace than the 315K rate seen the previous month. While that refueled the narrative that the Federal Reserve may rethink its most aggressive monetary tightening crusade since the 1980s, several officials have pushed back with a resolutely hawkish tone. Data on the U.S. wholesale inventories for September will be released at 10:00 a.m. EST, while data on consumer credit for August will be released at 3:00 p.m. EST.

Yesterday, U.S. equities fell for a second straight day as several Fed officials reiterated concerns about inflation and the need for policymakers to keep their adherence to raising interest rates. The declines came following a bigger-than-expected rise in weekly jobless claims. The losses were broad-based, with all but 4 stocks in the Dow Jones structure derailed. Shares of 3M (MMM) fell 3.5%, and 7 others lost 2%. Shares of airlines, cruise lines, and other travel-related companies declined. ConAgra's (CAG) stock price slid as the food maker reported having been hit hard by higher inflation and lower volumes in its fiscal Q1. Twitter (TWTR) shares dropped as Elon Musk and the board grapple with the details of their deal giving Musk control of the social media giant.

Equities are trading mixed in Europe, with technology shares underperforming following warnings from chipmakers over a “breathtaking” drop in demand. As of 2:30 p.m. CET, the Stoxx Europe 600 Index rose just 0.13%, the British FTSE 100 rose 0.17% and the French CAC 40 Index creeped up just 0.16%, while the German DAX is trading unchanged. After years of record capital spending, chipmakers are warning on a weekly basis that demand is sputtering. In the latest sign of trouble, Samsung Electronics Co. and Advanced Micro Devices Inc. reported disappointing results within hours of each other that widely missed projections.

Samsung (005935.HK) – the world’s largest memory chipmaker – reported a 32% decline in its operating income, while PC-processor maker AMD (AMD) said it will miss its earlier forecast by about $1 billion. Those numbers followed grim comments from memory makers Micron Technologies (MU) and Kioxia Holdings Corp., which announced slashing spending and output trying to stabilize plummeting prices. AMD shares fell in premarket trading, along with chipmakers including Nvidia Corp. (NVDA) and Intel Corp. (INTC).

According to Bloomberg, the British woke up this morning in glory of finding out about the risk of winter power cuts, as the country heads into the season with the smallest margin of back-up power supplies in seven years. That's not the only alarm bell being sounded, with firms suggesting their hiring plans are grinding to a halt and Halifax suggesting the housing market is also showing signs of weakness.

Meanwhile, France recorded a current account deficit of €5.1 billion in August versus a €5.3 billion gap in July, while its trade deficit increased to €15.3 billion in August from a revised €14.8 billion in the prior month. Labor productivity in the UK rose by 0.3% on quarter during the three months to June, while Halifax house price index rose 9.9% year-over-year in September. Industrial production in Germany declined 0.8% month-over-month in August, while retail sales fell 1.3% MoM in August. Import prices in Germany climbed by 32.7% YoY in the same month.

Asian markets traded mostly lower earlier this morning. Japan’s Nikkei 225 fell 0.71%, while Hong Kong’s Hang Seng Index fell 1.51%. Australia’s S&P/ASX 200 fell 0.8%, while India’s BSE Sensex gave up 0.1%. The index of coincident economic indicators in Japan rose to 101.7 in August from a final reading of 100.1 in the prior month, while the index of leading economic indicators increased to 100.9 from 98.9. Household spending in Japan surged 5.1% year-over-year in August. Foreign exchange reserves in China fell by $26 billion to $3.029 trillion in September.