Stock futures are little changed as traders await Friday’s jobs report: Live updates

This week’s spike in Treasury yields and the ensuing selloff in stocks doesn’t look great for balanced portfolios – but that doesn’t necessarily mean the model is broken.

The iShares Core Growth Allocation ETF (AOR), which is based on an allocation of 60% to equities and 40% to fixed income, is on pace for a 1.6% loss for the week as both asset classes saw price declines. The episode was reminiscent of last year when stocks and bonds suffered losses, and AOR returned -15.6%.

“It’s hard to conclude that just because of some recent trading action that those models aren’t useful,” said Joe Kalish, chief global macro strategist for Ned Davis Research. “Does it mean those models don’t work? Not necessarily.”

He noted that in an environment when bonds are closer to fair value on a longer-term basis, they should offer some diversification benefits in a 60/40 portfolio.

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–Darla Mercado

Recent strike activity from the United Auto Workers and the Writers Guild of America are unlikely to have a measurable impact on the September payrolls report due Friday, according to Vanguard’s chief global economist Joe Davis.

Leaders of the Hollywood writers’ union ended the strike on Sept. 27 after a nearly-150 day work stoppage, while the UAW’s strike has been ongoing since Sept. 15.

In all, Davis is calling for the economy to have added 145,000 jobs in September. Economists polled by Dow Jones anticipate some 170,000 payrolls were added in the period.

“Our below-consensus forecast stems primarily from labor supply headwinds,” he said.

He is also calling for average earnings growth of 0.3% from the prior month and 4.3% from the prior year.

“We expect September’s employment report will show a continued moderation in job growth, while affirming that wage growth is not yet on a secure downward trajectory to the Fed’s ~3% comfort level,” Davis said.

–Darla Mercado

The Topix Index in Japan is ahead 20% in 2023, excluding reinvested dividends. The Nikkei 225 has gained more than 19%. But a report out Thursday by Grantham, Mayo, Van Otterloo fund managers said stocks there are still a “compelling” opportunity.

“Improving fundamentals and governance reforms are increasingly evident” in the world’s third largest economy, said Drew Edwards and Rick Friedman. “EPS growth has been relatively strong in Japan for years, distributions of excess capital have increased, and policymakers continue to push for more competitive and capital-efficient companies.”

Still, with the Japanese yen tumbling about 17% since mid-January against the dollar, recently touching 150 yen, iShares MSCI Japan ETF, the largest Japanese ETF in the U.S. with more than $13 billion in assets, is trailing the benchmark stock indexes there. The EWJ is about 7.5% higher in 2023, but would be helped if the dollar weakened.

— Scott Schnipper

Levi Strauss & Co. shares slid about 1% in extended trading after the maker of denim jeans on Thursday reported weaker-than-expected revenue in its third quarter, and issued lackluster guidance.

Levi Strauss reported adjusted earnings of 28 cents per share, slightly lower than the 27 cents per share anticipated by analysts polled by FactSet. Revenue came in at $1.51 billion, weaker than estimates of $1.54 billion.

For the fiscal year, the clothing company anticipates per-share earnings in the low end of its previously guided range of $1.10 to 1.20, while analysts expected $1.11, according to consensus estimates. The revenue outlook was flat to 1%, lower than prior guidance of 1.5% to 2.5%.

“We have commenced an initiative to review our operating model and cost structure that should drive agility and material cost savings beginning in 2024,” said Harmit Singh, chief financial and growth officer of Levi Strauss.

— Sarah Min

The Dow Jones Industrial Average is headed for its third straight losing week, while the S&P 500 is on pace for its fifth. Here are where the major averages stand week to date:

The Dow is lower by 1.16%The S&P 500 is down by 0.7% The Nasdaq Composite is about flat

— Sarah Min

U.S. stock futures TK on Thursday night.

Dow Jones Industrial Average futures fell by 17 points, or 0.05%. S&P 500 futures and Nasdaq 100 futures dipped 0.06% and 0.02%, respectively.

— Sarah Min