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Nonfarm payrolls ahead, Apple earnings – what’s moving markets

0 — U.S. stock futures edge higher with markets preparing for the release of the much-anticipated April U.S. jobs market report. Apple shares (NASDAQ:AAPL) rise in afterhours trading, bolstered by a shallower-than-expected fall in quarterly revenue at the iPhone maker. Meanwhile, Sony (NYSE:SONY) and private equity group Apollo reportedly submit a bid for Paramount Global, sending shares in the entertainment group into the green on Thursday.

1. Futures edge up

U.S. futures traded higher on Friday, as investors digested earnings from tech giant Apple and looked ahead to a fresh monthly U.S. labor market report.

By 03:37 ET (07:37 GMT), the Dow futures contract had risen 214 point or 0.6%, S&P 500 futures had gained 9 points or 0.2%, and Nasdaq 100 futures had climbed by 74 points or 0.4%.

All of the main indices on Wall Street advanced on Thursday, boosted by interest rate commentary from the Federal Reserve earlier in the week that signaled a potentially dovish pivot. Fed Chair Jerome Powell noted that while sticky inflation has dented chances of an imminent rate cut, it was “unlikely” that the central bank will once again hike borrowing costs.

The tech-heavy Nasdaq Composite was the best performer out of the major averages thanks in part to better-than-anticipated quarterly sales and profit from Qualcomm (NASDAQ:QCOM). Shares in the chipmaker surged by more than 9%.

2. Apple’s quarterly sales dip, but top downbeat projections

Apple’s revenue fell in the opening three months of the year, but still topped analysts’ downbeat projections, sending shares in the iPhone maker higher in extended hours trading on Thursday.

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The California-based company posted quarterly total revenue of $90.75 billion, a 4% decrease compared to the year-ago period but above expectations of $90.32B, according to data.

In greater China, a market that has been a central focus for investors, sales fell 8% to $16.37B, amid rising competition from smartphone rivals in the country. Analysts had forecast revenue in China falling to $15.25B.

Sales of the iPhone device, which makes up about half of total revenue, declined to $45.96B from $51.33B a year earlier, but that just missed estimates of $46B.

Apple also announced a $110B stock buyback program and hiked its dividend by 4% to $0.25 a share, a move that senior analyst Thomas Monteiro said could bolster investor support and trust. Chief Executive Tim Cook also backed the firm’s plans for artificial intelligence, saying the nascent technology may help lift hardware demand.

3. Nonfarm payrolls due

The closely-monitored U.S. labor market report is set to be released on Friday, with the figures tipped to show that the world’s largest economy added jobs at a slower but solid pace last month.

Economists expect April’s nonfarm payrolls to come in at 238,000, down from 303,000 in March. The unemployment rate, meanwhile, is seen at 3.8%, matching the prior month. The rate of average hourly earnings growth is also projected to remain at 0.3% month-on-month.

Cooling labor demand has been a key objective of a rate tightening cycle by the Fed, with policymakers hoping that this softening may alleviate upward pressure on inflation. As such, ongoing resilience in the jobs market has partly persuaded Fed officials to shy away from interest rate reductions that were initially expected earlier this year.

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In a note, analysts at ING said the data will be “a huge event for markets” that will test the staying power of “more optimistic bets on Fed rate cuts” following the central bank’s latest policy decision earlier this week.

4. Sony, Apollo submit bid for Paramount – reports

Sony and private equity firm Apollo Global Management (NYSE:APO) have proposed an all-cash offer worth $26 billion for Paramount Global, according to media reports.

Apollo and Sony submitted their joint bid on Wednesday, people familiar with the situation told the Wall Street Journal, adding that the bid is nonbinding and only a starting point for negotiations. Sony, the Japanese group behind Paramount rival Sony Pictures, would be the majority investor in the deal, while Apollo would be the minority investor, the Financial Times also reported.

It marks the latest twist in the ongoing saga over Paramount. David Ellison’s Skydance Media has been in talks over a competing bid, with the exclusivity window for these talks due to expire this week.

Shares in Paramount’s non-voting class B shares jumped by more than 13% on Thursday following the news.

5. Oil inches higher

Crude prices edged higher from near seven-week lows Friday, but were headed for steep losses this week on demand uncertainty, robust U.S. stockpiles and easing tensions in the Middle East.

By 03:35 ET, the U.S. crude futures traded 0.5% higher at $79.31 a barrel, while the Brent contract climbed 0.5% to $84.05 per barrel.

Both benchmarks were set to lose between 5% and 6% this week, as investors worried about the prospect of higher-for-longer interest rates curbing growth in the U.S., the top global oil consumer, and in other parts of the world.

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