1. Dollar marches higher as caution sets in
The dollar hit its highest level in four months on perceptions that the U.S. economy is better insulated from the coronavirus than most other economies around the world.
The dollar index, which measures the greenback against a basket of developed market currencies, rose as high as 98.55 on the back of weak industrial production data out the euro zone that pushed the euro briefly below $1.0950.
However, it has also surged this week against emerging market currencies, many of which have been hit by the recent collapse in prices for oil and other industrial commodities. The dollar hit an all-time high against the Brazilian real and a six-month high against the Thai baht on Wednesday after those countries’ central banks cut their key rate interest rates, and it hit a four-month high against the ruble on Friday as the central bank of Russia followed suit.
The dollar also pushed through 7 Chinese yuan again overnight on a wave of public criticism of the authorities’ handing of the virus, undermining confidence that Beijing is on top of the public health emergency.
2. Payrolls Day
It’s payrolls day! The Bureau of Labor Statistics is set to release its monthly employment report at 8:30 AM ET (1330 GMT), with analysts polled by Investing.com predicting a rise of 160,000 in nonfarm payrolls and an unchanged unemployment rate of 3.5%.
The risk for the headline number is for an upside surprise, given the much stronger-than-expected private-sector payrolls report from ADP (NASDAQ:ADP) earlier in the week.
Average weekly hours are expected to remain stable from December at 34.3, while average hourly earnings growth is expected to tick back up to 3.0% after dipping slightly at the end last year.
3. Stocks set to open lower
U.S. stocks are set to open sharply lower Friday on fears that this week’s rally has gone too far, too fast.
By 6:40 AM ET (1130 GMT), Dow 30 futures were down 128 points, or 0.4%, while the S&P 500 Futures and Nasdaq 100 futures contracts were both down by the same amount.
Chinese and European shares had also traded lower overnight, the latter in particular hit by the biggest drop in German industrial production in a decade, while the former suffered from a loss of investor confidence as public anger mounted at the authorities’ handling of the coronavirus outbreak.
Pinterest (NYSE:PINS) stock may be among the outperformers after a better-than-expected quarterly update after the close on Thursday.
4. Uber's earnings set for good reception
Uber (NYSE:UBER) stock is set to open at highest level since August after the company predicted it would make its first quarterly profit – at least on an adjusted basis - by the end of the year. That’s a year earlier than CEO Dara Khosrowshahi had previously guided for.
The stock has risen more than 50% from a post-IPO low hit when early investors Goldman Sachs (NYSE:GS) and ex-CEO Travis Kalanick were dumping their holdings. Uber (NYSE:UBER) has also eased its cash burn by withdrawing from an increasing number of markets where it was not profitable.
However, the company’s losses still widened to over $1 billion in the fourth quarter, and Khosrowshahi promised to double-down this year on food delivery business UberEats, whose losses have consistently hurt the overall bottom line.
In related news, activist investor Elliott Management announced it had built a stake in Softbank, which has made a series of underperforming bets on startups such as Uber (NYSE:UBER) in recent years.
5. Thiam ousted as Credit Suisse's CEO
Tidjane Thiam resigned as chief executive of Credit Suisse (SIX:CSGN) in the wake of an embarrassing spying scandal. The Zurch-based institution rallied around its long-serving Swiss chairman Urs Rohner, who was understood to have been angered by the damage to the bank’s reputation from an episode in which management assigned detectives to follow wealth management head Iqbal Khan as he jumped ship to rival UBS.
Thiam had the support of major institutional shareholders, especially U.S. ones, who warmed to his focus on wealth management and Asia, and to his de-risking of the institution’s bloated investment bank.
However, Thiam leaves with his revolution unfinished, and with the bank’s stock down over 30% from when he was appointed. Credit Suisse (SIX:CSGN) stock fell another 3.1% in Zurich.
Thiam will be succeeded by Thomas Gottstein, the head of the bank’s domestic operations.