REUTERSA man gestures during a gathering of mourners on Vilakazi Street in Soweto, where the former South African President Nelson Mandela resided when he lived in the township, December 6, 2013
Good morning. Here’s what you need to know.
- Asian markets were mixed in overnight trading. Japan’s Nikkei closed up 0.81%, Hong Kong’s Hang Seng finished up 0.13%, while Korea’s KOSPI fell 0.22%. European markets were all higher, headed up by Germany’s DAX. U.S. futures were pointing higher as well.
- Nelson Mandela died yesterday at the age of 95, South African President Jacob Zuma revealed in a press conference. “Our nation has lost its greatest son, yet what made Nelson Mandela great was precisely what made him human,” Zuma said. “We saw in him what we seek in ourselves, and in him we saw so much of ourselves.”
- In his own press conference after the announcement, President Obama said, “We will not likely see the likes of Nelson Mandela again. So it falls to us as best we can to forward the example that he set — to make decisions guided not by hate, but by love, to never discount the difference that one person can make, to strive for a future that is worthy of his sacrifice.”
- It’s jobs day in America! At 8:30 a.m. ET, we’ll see the November employment figures, and economists expect U.S. companies added 185,000 nonfarm payrolls. That would bring that unemployment rate down to 7.2%. A strong report could perhaps signal to markets that the Federal Reserve will taper its asset purchasing program before year end. “In our view, the strength in the October employment report put the possibility of a December taper back on the table, after a weak September employment report had dimmed the prospects,” Deutsche Bank chief U.S. economist Joe LaVorgna wrote clients. “Another month of solid job gains (inclusive of revisions) increases the probability that policymakers will taper when they meet at the December 17-18 FOMC meeting.”
- How will the market react to the report? What’s already priced in? TD Securities interest rate strategy Gennadiy Goldberg wrote clients that “with the market already pricing in increasing odds of a January taper amid the steadily improving flow of economic data,” an above-consensus report in the range of 190,000-225,000 will only spark a “mild sell-off” in the Treasury market.
- There’s some more key data coming out this morning, like personal income and spending at 8:30 a.m. Economists are looking for income to increase by 0.3% and spending by 0.2% in October. “Within the former we are looking for a 0.2% increase in wages and salaries as well as positive contributions from rental and dividend income,” wrote Barclays’ economists. “On the spending side, we expect a 0.2% increase in real consumption as well, with a flat reading on the PCE price index and a 0.1% print on the core.”
- At 9:55 a.m., the University of Michigan Consumer Confidence report will be released. Economists expect a reading of 76.0, up from the previous 75.1 print. “This report will provide us with limited information about December, as it will be reported after just five survey days,” wrote Citi’s Peter D’Antonio. “However, it will give a relatively pure view on the period around the crucial Thanksgiving kickoff to holiday selling.”
- At 3:00 p.m. we’ll get consumer credit. Economists estimate that credit balances grew by $US14.5 billion in October. “Nonmortgage consumer credit continues to rise quite rapidly,” said UBS’s Kevin Cummins. “About 70% of the rise over the past year has reflected Federal lending — primarily student loans. However, commercial banks and finance companies have also been increasing lending.”
- Revenue at Gap stores open at least a year rose 2% in November, beating analyst expectations for 0.8%. Gap’s result is a highlight in an otherwise lackluster set of sales statistics, which included low numbers on Black Friday. In other retail news, American Eagle Outfitters will report earnings today. Analysts are expecting an EPS of $US0.19.
- Shanghai, China is completely shrouded in fog, delaying and cancelling hundreds of flights. The air pollution situation continues to get worse, with the government on Friday issuing a severe health warning as the city’s pollution index spiked to between 23-31 times the healthy level, Reuters reported.
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