While 170,000 job creations were expected in September, payrolls increased by 336,000. However, the unemployment rate remained at 3.8%, while the consensus expected a slight decline. US futures tumbled after the report.

But let’s go back to Thursday's stock market session, which was marked by a return to calm after the turmoil of the early part of the week, following the surge in bond yields.  Wall Street retreated from its gains of the previous session, while indices bounced back in Europe from their contraction of the previous day. Since US employment seems to be the adjustment variable for market sentiment this week, I'd like to point out that the August job data published on Wednesday had the effect of reassuring investors, while the ADP job report published yesterday plunged them back into perplexity. We remain in a "good economic news is bad news for equity markets" configuration, in the sense that persistently strong employment data would be synonymous with keeping interest rates high for longer. Conversely, any bout of weakness in the labor market would raise hopes of an end to the monetary tightening cycle. And today, was a “good news is bad news” configuration. I can’t help but feel that we’ve seen this before…  I think I've written these explanations in different forms dozens of times since the beginning of the year. So, let’s not dwell on this topic.

In other news, oil remains under pressure after losing USD 12 per barrel from its late-September highs. On the geopolitical front, the White House has begun preparations for a meeting between US President Joe Biden and his Chinese counterpart Xi Jinping, according to the Washington Post, which talks of a meeting in San Francisco as early as November. Equity markets generally welcome signals of détente in the complex web of Sino-American relations. Meanwhile, the SEC is investigating how Elon Musk acquired a stake in Twitter. This will do nothing to improve the already strained relations between the billionaire and the institution. Last but not least, two major deals are in the pipeline, according to rumors in the press: French lab Sanofi is said to have set its sights on American group Mirati, while Exxon Mobil could buy Pioneer Natural Resources. This second deal falls into the "megadeal" category, as it is valued at $60 billion.

Today's economic highlights:

Today on the macro agenda, we have Swiss unemployment figures and German factory orders, France's current account and trade balances, hourly rate for permanent employees in Canada, US non-farm payrolls and September unemployment.

The dollar is up 0.4% to EUR 0.9522 and GBP 0.8246. An ounce of gold is trading at USD 1812. Oil remains under pressure, with North Sea Brent at USD 83.96 a barrel and US light crude WTI at USD 82.06. The yield on 10-year US debt stabilizes at 4.71%. Bitcoin trades at USD 27,300.

In corporate news:

  • Tesla lowered prices for its Model 3 and Model Y electric vehicles in the United States from 2.7% to 4.2%, a few days after missing consensus on its third-quarter deliveries. The stock is down 1.1% in pre-market trading, due to fears about the Group's margins, which are close to a four-year low.
  • Exxon Mobil is in advanced discussions to acquire Pioneer Natural Resources in a deal that could value the Permian Basin shale producer at around $60 billion, sources close to the matter reported on Thursday. Exxon Mobil shares lost 1.6% in premarket trading, while Pioneer jumped 12.1%.
  • Nvidia, AMD - OpenAI, the company behind ChatGPT, is planning to design its own chips for artificial intelligence and is considering possible acquisitions, Reuters has learned from sources close to the matter.
  • Levi Strauss & Co lowered its sales and earnings forecasts for the second time this year on Thursday evening, after missing consensus on third-quarter sales due to over-promotion and weaker demand from wholesalers in North America. The share price fell by 5.3% in after-hours trading.
  • Rivian Automotive is down 0.5% after a capital increase through the sale of $1.5 billion in green convertible bonds.
  • Bunge - On Thursday, shareholders of the grain and oilseed processor approved a proposed merger with Glencore-backed Viterra, creating a group valued at $34 billion, including debt.
  • MGM Resorts International said Thursday it expected a $100 million impact on its third-quarter results from a cyberattack that disrupted its operations last month.
  • Apple, Alphabet - DuckDuckGo's chief executive said talks with Apple over a deal to integrate its Internet search engine had collapsed because of the billions of dollars Alphabet subsidiary Google is paying the Apple group to be the default service on its smartphones, according to transcripts of a lawsuit targeting the Internet giant.
  • Paypal Holdings has been on trial since Thursday in California as part of a consumer antitrust lawsuit, on suspicion of entering into agreements with online merchants to keep transaction fees artificially high. In addition, TD Cowen began tracking the stock on Friday at "performance in line with the market".

Analyst recommendations:

  • Alexandria real: Evercore ISI maintains its outperform rating and reduces the target price from USD 135 to USD 121.
  • Aon plc-class a: Jefferies maintains its hold recommendation with a price target raised from USD 331 to USD 339.
  • Arch capital: Jefferies maintains its buy recommendation and raises the target price from USD 89 to USD 95.
  • Autozone: Oppenheimer downgrades to market perform from outperform with a price target reduced from USD 2850 to USD 2600.
  • Boohoo group plc: Liberum maintains its hold recommendation with a price target reduced from GBX 35 to GBX 32.
  • Brown & brown: Jefferies maintains its buy recommendation and raises the target price from USD 83 to USD 85.
  • Bunzl plc: Barclays upgrades to equalweight from underweight with a target price raised from GBP 27.50 to GBP 31.
  • Burberry group: CIC Market Solutions maintains its buy recommendation and reduces the target price from GBP 25 to GBP 22.
  • Cincinnati fin: Piper Sandler & Co maintains its neutral recommendation with a price target reduced from USD 117 to USD 105.
  • Constellation: HSBC maintains its buy recommendation and raises the target price from USD 280 to USD 290.
  • Harbour energy p: Canaccord Genuity maintains its buy recommendation with a price target raised from GBX 435 to GBX 440.
  • Healthpeak prope: Evercore ISI maintains its outperform rating and reduces the target price from USD 26 to USD 24.
  • Hess corp: JP Morgan maintains its overweight rating and raises the target price from USD 157 to USD 161.
  • Imperial brands: Citi upgrades to buy from neutral with a price target raised from GBP 18.65 to GBP 19.80.
  • Man group: BNP Paribas Exane upgrades to outperform from neutral with a price target raised from GBX 245 to GBX 275.
  • Marsh & mclennan: Jefferies maintains its hold recommendation with a price target raised from USD 194 to USD 209.
  • O'reilly automot: Oppenheimer downgrades to market perform from outperform with a price target reduced from USD 1000 to USD 930.
  • Progressive corp: Jefferies maintains its buy recommendation with a price target raised from USD 163 to USD 167.
  • Sherwin-williams: Loop Capital Markets maintains its buy recommendation and reduces the target price from USD 325 to USD 315.
  • Spirent comm: Numis downgrades to hold from buy with a price target reduced from GBX 275 to GBX 95.
  • Tullow oil: Canaccord Genuity maintains its speculative buy recommendation and raises the target price from GBX 42 to GBX 50.
  • Veralto corp: Citi maintains its neutral recommendation with a target price of USD 87.
  • Welltower inc: Evercore ISI maintains its in-line recommendation with a price target reduced from USD 86 to USD 83.
  • Willis towers wa: Jefferies maintains its hold recommendation with a target price raised from USD 218 to USD 226.
  • Wizz air holding: HSBC upgrades to hold from reduce with a price target reduced from GBP 22.60 to GBP 19.25.