Overnight – ECB joins Canada in pre-emptive rate cut

Equities took a breather after notching a record high a day earlier, as investors weighed up the ECB’s rate cut and further signs of cooling in the labor market, just a day ahead of the crucial monthly U.S. jobs report.  

The number of Americans filing for first-time unemployment benefits rose by more than anticipated last week, climbing 229,000, up from an upwardly revised total of 221,000 in the prior week, ahead of economists’ forecasts of 220,000. The latest sign of cooling in the labour market following similar data earlier with private payrolls and jobs openings falling short of estimates. Friday sees the release of the widely-watched monthly payrolls report, with economists expecting the U.S. economy to have added 185,000 jobs, a modest uptick from the prior month. Bets on global rate cuts are picking up steam after the European Central Bank delivered its first cut on Thursday. 

Nvidia gave up intraday gains, falling 1% a day after crossing $3 trillion in valuation and overtaking Apple  as the second-largest company on Wall Street amid growing hype over its exposure to artificial intelligence.

In sideshow alley, GameStop jumped 47% after the Keith Gill, also known as Roaring Kitty, who sparked the original meme stock rally in 2020, scheduled a livestream on Youtube. The meme stock rally is more an indicator of the US markets disconnect of the value of “money” than a bullish signal.

All eyes turn to payrolls numbers tonight for confirmation of a weakening economy, with any number significantly below or above the consensus of +185k likely to see equities fall