T3’s Take 3: Traders Yawn Ahead of the Fed


1) Twitter No Go?

This morning, Recode.net reported that Google (GOOGL), Apple (AAPL), and Disney (DIS) are not interested in acquiring Twitter (TWTR), sending shares of the social media giant crashing down.

This drastically shrinks the list of potential Twitter suitors.

Salesforce.com (CRM) had also been named as a potential buyer, though yesterday, CEO Marc Benioff hinted that he has no interest in Twitter.

Plus, many market observers have pointed out that Twitter may simply be too expensive for Salesforce.

Twitter shares, which have been skyrocketing on takeover speculation in recent weeks, fell -20.1% to $19.87 today.

Meanwhile, Salesforce shares rose 4.2% to $71.26 as traders see a lower probability of deal with Twitter.

2) Stocks Enter Holding Pattern Ahead of Pivotal NFP Report

The S&P 500 went sideways today as traders await Friday’s September jobs report.

The index rose 0.1% to 2162.33 while the Nasdaq fell -0.1%.

Energy stocks had a nice day after WTI crude oil shot above $50 for the first time since June 29. Oil service names were especially strong.

Meanwhile, gold continued selling off as the US dollar strengthened ahead of the NFP report. The gold miners ETF (GDX) fell 3.4% to $22.77.

US Treasuries also continued falling.

Overall, it was a fairly boring day, with the indices  trading in an extremely tight range for most of the afternoon.

Tomorrow, however, may bring some excitement.

3) Jobs Report to Swing the Fed?

In recent days, we’ve seen traders upping their bets on Federal Reserve rate hikes on hawkish chatter from Fed officials and solid economic data.

Fed funds futures imply a 63% probability of a December rate hike, and this number could move substantially tomorrow morning when the September nonfarm payroll report hits.

Economists expect a gain of 172K jobs with a 4.9% unemployment rate and 0.3% month-over-month growth in average hourly earnings.

I’d watch gold closely tomorrow.

Precious metals have been falling hard as the dollar has risen, and if tomorrow’s NFP report disappoints, we could see a hard snapback in gold.

Friday's Trading Calendar

US Economics (Time Zone: EDT)

08:30 Change in Nonfarm Payrolls (Sep): exp. 172k, prior 151k
08:30 Two-Month Payroll Net Revision (Sep): prior -1k
08:30 Change in Private Payrolls (Sep): exp. 170k, prior 126k
08:30 Change in Manufact. Payrolls (Sep): exp. -4k, prior -14k
08:30 Unemployment Rate (Sep): exp. 4.90%, prior 4.90%
08:30 Average Hourly Earnings MoM (Sep): exp. 0.30%, prior 0.10%
08:30 Average Hourly Earnings YoY (Sep): exp. 2.60%, prior 2.40%
08:30 Average Weekly Hours All Employees (Sep): exp. 34.4, prior 34.3
08:30 Change in Household Employment (Sep): prior 97
08:30 Labor Force Participation Rate (Sep): prior 62.80%
08:30 Underemployment Rate (Sep): prior 9.70%
09:15 ECB Board Member Praet on Panel in Washington
10:00 Wholesale Inventories MoM (Aug F): exp. -0.10%, prior -0.10%
10:00 Wholesale Trade Sales MoM (Aug): exp. 0.10%, prior -0.40%
10:30 Fed's Fischer Speaks in Washington
12:45 Fed's Mester Speaks in New York
13:00 Baker Hughes U.S. Rig Count (10/7): prior 522
13:00 Baker Hughes U.S. Rotary Gas Rigs (10/7): prior 96
13:00 Baker Hughes U.S. Rotary Oil Rigs (10/7): prior 425
15:00 Consumer Credit (Aug): exp. $16.500b, prior $17.713b
15:00 Fed's George Speaks in Washington
16:00 Fed's Brainard Speaks in Washington
16:15 IMF Panel on Trade and Growth
FRB's Fischer and BOC's Wilkins Speak at IFF Annual Meeting
Riksbank Board Members at IMF, World Bank Annual Meetings

Global Economics

03:00 CHF Foreign Currency Reserves
03:30 GBP Halifax HPI m/m
04:30 GBP Manufacturing Production m/m
08:30 Unemployment Rate
10:00 CAD Ivey PMI
21:45 CNY Caixin Services PMI


Before Open:

None of significance

After Close:

None of significance