October 2nd Pre-Market Brief

Good Morning

The jobs report just landed way behind expectations, with 29,000 jobs added in September against forecasts in the 80,000s. That's tough for anyone job hunting. For anyone waiting on lower rates, it's a friendlier morning. Add oil cooling off overnight, and this is a calmer Friday than the week deserved.

Let's dig in...

Today's Big Picture

1. Traders Moved The Next Fed Hike To December

Employers added just 29,000 jobs in September, and revisions turned July into a month of job losses. Unemployment rose and pay barely grew, so traders now see about a one-in-seven chance of an October hike. Odds of a December hike actually edged up, to nearly two in three. Goldman Sachs Asset Management says higher energy prices could still force the Fed's hand.

2. Oil Futures Fell, But Refiners Are Still Paying Up

Brent fell below $100 on reports Europe may release diesel and crude reserves, a plan Washington pushed for. The 100 million barrels under discussion cover less than 10 days of EU demand. North Sea crude for immediate delivery sold for $127 on Thursday, about $25 above futures, as refiners raced to lock in supply. Barclays pointed to that gap when it raised its fourth-quarter Brent forecast to $115.

3. Iran Has Little Left To Lose On Oil Exports

Treasury Secretary Bessent says Iran loaded no crude onto tankers in September. With its own exports gone, Iran's leverage is its neighbors' oil, and a tanker was hit in Hormuz on Thursday. The U.S. is sending a third aircraft carrier group and thousands more troops, due by late November. The Wall Street Journal reports Trump has told aides he expects to resume bombing after the Nov. 3 midterms.

Market Overview

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Stock Spotlight (pre-market)

Nike $NKE ( ▼ 0.71% )  

sliding to a 13 year low premarket after forecasting a full year revenue decline. First quarter sales also missed on weak China results, which outweighed a profit beat. Nike plans layoffs starting in 2027 as part of a $2.5 billion cost cutting program.

Synaptics $SYNA ( ▲ 4.69% )  

sharply higher premarket after ON Semiconductor $ON ( ▲ 4.18% ) agreed to buy it for $123 a share in cash, replacing an all stock deal. ON changed the terms after a rival made an unsolicited offer, and the new deal is worth about $5.7 billion. ON is also higher after saying the cash deal adds to its earnings right away.

Fair Isaac $FICO ( ▲ 11.69% )  

is lower premarket after Bloomberg reported that the regulator over Fannie Mae and Freddie Mac plans to cut required credit reports on those mortgages from three bureaus to two. Fewer reports per loan means less mortgage revenue.

Moderna $MRNA ( ▼ 1.89% )  

higher premarket after Nasdaq said it will replace Warner Bros. Discovery in the Nasdaq 100 on Oct. 9. Index funds will have to buy the stock, which is up more than sixfold this year on cancer vaccine results with Merck.

Amazon $AMZN ( ▼ 0.37% )  

edging higher premarket on reports it wants to sell about $8 billion of Nvidia chips to outside investors and lease them back, freeing up cash. The Financial Times also reports Amazon is raising the prices it charges customers to rent AI chips.

Strategy $MSTR ( ▲ 4.84% )  

higher premarket after Citi raised its price target to $240 from $136. The company is a large bitcoin holder, and Citi also raised its 12-month bitcoin target to $113,000.

What to Watch

Does The Typical Stock Catch Up?
Yesterday we flagged Bespoke's call that the typical S&P 500 stock keeps lagging the index until oil falls. Brent is under $100 this morning, so today is the first real test. The equal weight S&P 500 $RSP ( ▲ 0.5% ) , which gives every stock the same weight, is the simplest way to track it.

Europe's Diesel Decision (Today)
EU governments are weighing France's reserve plan today, and Macron plans a G7 video call on fuel prices. Saxo Bank says part of the goal is heading off a U.S. diesel export ban. If Europe signs on, that ban gets less likely, which matters most for U.S. refiners that ship diesel abroad, like Valero $VLO ( ▲ 5.38% ) and Marathon Petroleum $MPC ( ▲ 6.25% ) . If talks stall, today's oil drop loses its main support.

Fed's Logan And Factory Orders (10 AM ET)
Dallas Fed President Lorie Logan, who votes on rates this year, opens a workshop on migration and the economy. Any comment on the jobs number or the bond selloff is an early read on how Fed voters are taking both. August factory orders, a gauge of demand for manufactured goods, come out at the same time.

Want to Know about this years upcoming IPO’s?
MarketBeat did an excellent job on this free IPO guide on IPO’s happening this year

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