Morning Call For Friday, Dec. 7

Overnight Markets And News

Dec E-mini S&Ps (ESZ18 -0.46%) this morning are down -0.58% ahead of this morning's U.S. Nov non-farm payroll report. Trade concerns continue to weigh on U.S. equity markets after the arrest of the CFO of China's Huawei in Canada for possible violation of banking laws as Huawei sought to evade sanctions against Iran by routing a series of transactions through HSBC Holdings Plc. Markets are concerned that China may retaliate for her arrest by ending trade talks with the U.S. Weakness in energy stocks is also weighing on U.S. stock indexes with Jan WTI crude oil (CLF19 +0.85%) down -0.12%. Crude oil gave up overnight gains after an OPEC delegate said that talks are deadlocked over crude production cuts as Iran said it will not accept a symbolic output cap. European stocks are up +1.00% as they recover from Thursday's slide to a 2-year low. Asian stocks settled mostly higher: Japan +0.82%, Hong Kong -0.35%, China +0.03%, Taiwan +0.79%, Australia +0.42%, Singapore -0.14%, South Korea +0.41%, India +1.02%. Japanese stocks rallied on stronger-than-expected Oct labor earnings, which may lead to a boost in consumer spending.

The dollar index (DXY00 -0.01%) is down -0.01%. EUR/USD (^EURUSD +0.05%) is up +0.04%. USD/JPY (^USDJPY +0.13%) is up +0.12%.

Mar 10-year T-note prices (ZNH19 -0-025) are down -2 ticks.

Fed Chair Powell said, "our economy is currently performing very well overall, with strong job creation and gradually rising wages. Our labor market is very strong."

Eurozone Q3 GDP was revised downward to +1.6% y/y from the previously reported +1.7% y/y, the slowest pace of growth since Q4 of 2014.

German Oct industrial production unexpectedly fell -0.5% m/m, weaker than expectations of +0.3% m/m.

Japan Oct labor cash earnings rose +1.5% y/y, stronger than expectations of +1.0% y/y, Oct real cash earnings fell -0.1% y/y, stronger than expectations of -0.3% y/y.

U.S. Stock Preview

Key U.S. news today includes: (1) Nov non-farm payrolls (expected +198,000, Oct +250,000) and Nov unemployment rate (expected unch at 3.7%, Oct unch at 3.7%), (2) Nov avg hourly earnings (expected +0.3% m/m and +3.1% y/y, Oct +0.2% m/m and +3.1% y/y), (3) revised Oct wholesale inventories (previous +0.7%), (4) preliminary-Dec University of Michigan U.S. consumer sentiment (expected -0.5 to 97.0, Nov -1.1 to 97.5), (5) Fed Governor Lael Brainard speaks about current financial stability issues at the Peterson Institute in Washington D.C., (6) Oct consumer credit (expected +$15.000 billion, Sep +10.923 billion).

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