By Geoffrey Smith
Investing.com -- A week of U.S. economic data reaches its climax with the release of the employment report for August, with another solid 300,000 gain in nonfarm jobs expected. Durable goods orders are also due. Europe's gas prices ease as the fear of an extended shutdown for a key pipeline recedes. Stocks are set to open flat but Lululemon is set for strong gains after raising its outlook for the year. Oil ticks up but is on course for its lowest weekly close in eight months. And east Asia braces for the most destructive typhoon of the year so far. Here's what you need to know in financial markets on Friday, September 2.
1. Jobs report
The U.S. releases its monthly labor market report at 08:30 ET (12:30 GMT), at the end of a week when economic data have suggested that the economy is – at least for now - nowhere near falling into recession.
The jobs report is likely to validate that with another 300,000 increase in non-farm payrolls, a number that, while a slowdown from earlier in the year, would still represent a decent gain in any normal month. Given the hawkish comments from Federal Reserve officials in the last week, it will take a significant downside surprise to change market sentiment.
As usual, there will also be focus on the pace of earnings growth, which is expected to have been slowed only marginally to 0.4% on the month, implying an annual gain of 5.3% - significantly below the current rate of inflation. Separately, but simultaneously, the U.S. will also release durable goods orders data for August.
2. Nord Stream relief
European gas prices eased off as the operator of the Nord Stream pipeline, which takes gas from Russia to Germany, said that shipments through the link will resume on Saturday, as previously announced by Russian gas monopoly Gazprom (MCX:GAZP).
The news soothed fears that Gazprom would use the pretext of maintenance to shut down the pipeline for longer, in order to pressure Europe into abandoning its support for Ukraine in the ongoing war.
Benchmark northwest Europe Gas Futures fell 13.2% to a three-week low of 210 euros a megawatt-hour but, at still 10 times their usual prewar levels, continue to trade at crisis levels for European industry.
3. Stocks set to open mixed; Lululemon soars on strong results
U.S. stock markets are set to open mixed after another largely negative day on Thursday, which extended the NASDAQ Composite’s losing streak to five days, even though the Dow and S&P managed to snap theirs.
By 06:15 ET, Dow Jones futures were up 16 points, or less than 0.1%, while the S&P 500 futures contract was flat, and the Nasdaq 100 futures contract was down another 0.1%.
Market participants appear largely content to sit on their hands ahead of the payrolls numbers, but Bed Bath & Beyond (NASDAQ:BBBY) seems set for another tough day, down 5.6% in premarket, while Lululemon (NASDAQ:LULU) is up nearly 10% after it beat forecasts for the latest quarter and raised its guidance for the rest of the year.
DocuSign (NASDAQ:DOCU), a proxy for the ‘profitless tech’ sector, heads a thin earnings slate.
4. East Asia braces for typhoon
South Korean stocks fell and the won weakened as the country braced for a destructive typhoon, said to be the worst storm to hit it since it started compiling records.
Forecast models suggest that Typhoon Hinnamnor will push northwards through the East China Sea, disrupting mainland China, Japan as well as the Korean peninsula. Winds are expected to stay at least at category 3 strength (around 115 mph) until Monday morning, when the eye of the storm is due to approach Nagasaki and Busan.
The storm is expected to bring up to 10 inches of rain to the Korean capital, Seoul, in the space of 48 hours.
5. Oil ticks up as Kremlin warns on price cap plans
Crude oil prices rose but are still on course to end the week lower amid fears of another dip in Chinese demand, and the ongoing pain of a high dollar exchange rate.
Overnight, the Kremlin warned that it will refuse to ship oil to any country that falls in with U.S. and European plans to impose a price cap on its exports. The plans already face seemingly insurmountable practical difficulties, given the global competition for fuel supplies.
By 06:30 ET, U.S. crude futures were up 2.2% at $88.50 a barrel, while Brent was up 2.1% at $94.26 a barrel. They’re still on course for their lowest weekly close since January.
Baker Hughes’ rig count and the CFTC’s positioning data round off the week later.