Bloomberg Business
-Nonfarm payrolls: The view among economists is that if today’s Nonfarm Payrolls growth comes in close to the projected 185,000 it will allow the Federal Reserve to press ahead with its first rate rise since 2006 at its December meeting. The market is already pricing in higher chances of an increase in benchmark interest rates, as the dollar rises to its highest level since March and U.S. Treasury yields climb. The payrolls number will be released at 8:30 a.m. ET.
-Hedge funds burnt by Valeant: Valeant Pharmaceuticals International Inc. dropped below $80 a share as pressure on the company continues to build and questions over its relationship with mail-order pharmacy Philidor Rx Services continue to be raised. Hedge-fund managers had piled into the stock, making it the company with the second highest hedge-fund ownership in America and pushing the share price over $250. Now that the price has collapsed, it may not be able to find new buyers to prop up its stock, with Benjamin Dunn, president of Alpha Theory Advisors saying: «It’s toxic at this point.”
-China: The Shanghai Composite Index extended its rally, climbing 1.9 percent to take the week’s gain to 6.1 percent. Authorities said they will by the end of the year lift a freeze on initial public offerings which was introduced when the market suffered a $5 billion rout in the summer. There was evidence of an intervention in the currency market overnight as the spread between the offshore and onshore yuan widened and then tightened sharply – a potential sign authorities are becoming less tolerant of diverging rates ahead of an IMF review that may lead to yaun inclusion in its SDR basket.
-European industrial production drops: German industrial production unexpectedly dropped in September, falling 1.1 percent from August. In the U.K., industrial production also fell more than expected, declining 0.2 percent from a month earlier. European stocks are falling for a second day, with the Stoxx 600 sliding 0.5 percent by 11:00 a.m. London time.
-Allianz profit falls, see green shoots at Pimco: Allianz SE, the parent company of Pimco and Europe’s biggest insurer, said third-quarter profit dropped 15 percent as earnings from its property and casualty and asset management units declined. Chief Financial Officer Dieter Wemmer said in an interview with Bloomberg Television that the company sees «the first green shoots” in its Pimco unit following fallout from the departure of Bill Gross. The former bond king will be on Bloomberg Television later this morning.
CNN Money
–The jobs report is out!: The October jobs report shows the U.S. economy created 271,000 positions in October, beating expectations for 181,000 new jobs. The unemployment rate declined slightly to 5%, a modest improvement from September’s 5.1% level. The economy is considered healthy when it’s creating at least 200,000 jobs per month. However, investors aren’t thrilled with the numbers since they worry that a stronger economy will mean the end of cheap money. Many are expecting the U.S. Federal Reserve could now raise interest rates in December. U.S. stock futures are dipping ahead of the opening bell and yields on U.S. government bonds are jumping.
-Premarket movers: Shares in miner BHP Billiton (BHP) are declining by about 5% premarket after a dam at one of its Brazilian mines broke and flooded a nearby village. Many fatalities have been reported, but the company said «we still don’t know the full extent of the situation.» Menswear firm Jos. A. Bank reported poor sales and a bleak profit outlook on Thursday, which has caused shares in parent company Men’s Wearhouse (MW) to plunge by roughly 30% in extended trading. Shares in TripAdvisor (TRIP) are falling around 10% premarket as investors react to disappointing earnings. Shares in Monster Beverage (MNST) are rising by about 8% premarket as investors cheer better-than-expected quarterly results.
-Takata trouble: Shares in the troubled auto parts manufacturer Takata dropped another 6% in Japan as more large automakers say they will stop using the company’s airbags. The value of the stock has halved since the start of the year as the company has struggled to respond to a deadly airbag scandal.
-Losses in luxury: Shares in major European luxury brands are taking a hit Friday after Richemont (CFRUY) announced weak sales in the past month and disappointing performance in Asia. It also said the head of its Cartier brand had left the company. Shares in Richemont dropped 8%. Shares in LVMH (LVMHF) and Swatch Group (SWGAY) followed with falls of about 5% as investors worried about weakness in the industry.