US futures rise slightly on countdown to jobs report

U.S. stock futures rose slightly on Friday, indicating losses were avoided as nervous investors focused on rising oil prices ahead of the important monthly jobs report.

Dow Jones Industrial Average (^DJI) futures rose about 0.2%, while S&P 500 (^GSPC) futures rose 0.3% following their biggest single-day decline since February. The tech-heavy Nasdaq 100 (^NDX) contract rose 0.3%.

on Thursday as oil prices hit six-month highs, raising concerns about accelerating inflation and a slew of Federal Reserve speakers shaking confidence that interest rates will be cut soon. Major indicators fell.

Stocks now face a test with the much-anticipated March jobs report, which is closely watched by Fed policymakers in deliberations about the health of the economy and easing borrowing costs. The statistics are expected to show signs of cooling in the labor market, which has remained strong for two months. The job gains have shocked Wall Street since the beginning of the year.

Market tensions are rising following this week's turbulent stock market movements. Investors are juggling economic announcements and corporate news alongside rising tensions in the Middle East, seen as a curveball for a market more accustomed to FedSpeak discussions than geopolitics.

Oil prices remained near multi-month highs on Friday, rising sharply amid rising tensions between Israel and Iran. International benchmark Brent crude oil futures (BZ=F) topped $91 per barrel, while West Texas Intermediate futures (CL=F) traded at $86.77.

The monthly jobs report, scheduled to be released Friday at 8:30 a.m. ET, predicts that nonfarm payrolls will increase by 213,000 in March and the unemployment rate will fall to 3.8%. .

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Friday, April 5, 2024 4:00 a.m. (Pacific Daylight Time)

This is Wall Street's new top price target for Netflix

The bull market for Netflix (NFLX) is just beginning, argues Pivotal Research analyst Jeffrey Rodarchuk.

This morning, Wrodarczak raised his price target on Netflix stock by $65 to a street high of $765, predicting an upside of about 24% from current levels. The stock is up 27% since the beginning of the year.

At the core of the revised price target are higher assumptions regarding subscriber growth and average revenue per user. Wlodarczyk believes there is “certain momentum” in each metric given the unparalleled content Netflix offers. Wlodarchik's comment:

“At the end of the day, our positive investment view remains. Netflix is winning the streaming wars, and continued strong average revenue per subscriber/user and free cash flow generation should support the stock. Netflix What keeps the flywheel moving is that the bigger the company, the more influence it has over its fellow content creators, the better its product (and the more subscribers it gets). /drive higher average revenue per user) and create a larger moat around the core business. model. “
Friday, April 5, 2024 3:45 a.m. (Pacific Daylight Time)

PepsiCo attracts attention as a safe haven

One stock that hasn't been in trouble over the past month is PepsiCo (PEP).

The stock has risen 2.6% over the past four weeks, outpacing the S&P 500's 0.3% rise. Coca-Cola (KO) fell 0.9%.

Jefferies analyst Kaumil Gajrawala seems even more invested in the stock's performance today, adding PepsiCo to his list of “franchise picks” (excluding Colgate).

Gajrawala sees several factors driving the share price. 1) International business has the potential for unexpected upside given its size and accounts for approximately 40% of PepsiCo's total business. 2) A long runway for the snacking category. 3) Potential for above-average profit margins due to beverage and snack operations and cost reductions.

“There are so many things I like,” Gajrawala says.

I spoke to PepsiCo Chairman and CEO Ramon Laguarta at the World Economic Forum in late January. The video below gives a good idea of what his team is trying to do this year.
Friday, April 5, 2024 3:30 a.m. (Pacific Daylight Time)

Jefferies' big request to Uber

Jeffries believes Uber stock will continue to rise.

Uber's price target was raised this morning by analyst John Colantuoni from $95 to $100, projecting an upside of about 33% from current levels.

This call seems logical to me as it focuses on Uber's ability to acquire new customers by offering new mobility product tiers. Colantuoni's comment:

“Uber has dramatically expanded its mobility offering in recent years, growing its portfolio from just two products (UberX/Black) in 2011 to up to 20 products today.Addressing more use cases This allows Uber to acquire new users, drive increased frequency through the introduction of multiple products, and expand its overall addressable market by providing more driving alternatives. Expand.”

The statistics that support Colantuoni's call are that bookings for new mobility products reached $8.5 billion in 2023, up from $2.3 billion in 2021.
Friday, April 5, 2024 3:15 a.m. (Pacific Daylight Time)

Goldman Sachs says to keep an eye on this area of employment statistics

Impact of immigration.

Goldman Sachs has done some good research recently on the economic impact of immigration on the US economy, and its team is continuing that analysis ahead of today's March jobs report.

Chief economist Jan Hadzius estimates non-farm payrolls rose by 240,000 in March, beating the consensus of 213,000, in part due to an increased supply of migrant workers. .

Here are Hatzius' thoughts on this issue:

“Last year, the labor supply increased by about 80,000 people per month due to an increase in immigration compared to previous years, and we expect the tailwind to continue this year by an average of 50,000 people per month.Especially in March, the labor supply will increase by about 80,000 people per month. Further significant increases are expected due to the influx of job seekers.'' People who did not find work as of February (241,000 new unemployed people since November).

“Given the still high level of recruitment and the active spring hiring season, we estimate that many of these labor force entrants found jobs during the March survey period. Tomorrow's report is expected to increase employment compared to normal. ”

The influx of immigrants affects the US labor market. (Goldman Sachs)
Friday, April 5, 2024, 3:00 a.m. (Pacific Daylight Time)

And we're watching Nvidia

Focus on market leader Nvidia (NVDA).

The stock price fell below the 20-day moving average as the overall market declined. Naturally, it's always cause for concern when an investor-favorite company like Nvidia lags. Many on the street will say things like, “As Nvidia goes, so goes the market.”

They wouldn't be wrong.

Great chart in this thread by Julian Emanuel of EvercoreISI. He highlighted how Nvidia stock underperformed last summer, which weighed on the overall market. He suggests this pattern could start again.

So is Nvidia and the market. (Evercore ISI)