Workers at a restaurant at Grand Central Market in Los Angeles, California, US, on Thursday, Nov. 2, 2023.
Eric Thayer | Bloomberg | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
U.S. stocks retreat
Wall Street finished Friday’s session lower as investors look ahead to key inflation data due out this week. The benchmark S&P 500 and tech-heavy Nasdaq Composite slipped 0.65% and 1.16%, respectively. The blue-chip Dow lost 0.18%, closing out its worst week since October.
Japan skirts technical recession
Japan avoided a technical recession as revised fourth-quarter data revealed the economy returned to growth. Gross domestic product grew 0.4% in the October-December period compared with a year ago. This comes after provisional data released in February showed the economy was in contraction.
AirAsia CEO on topless post
AirAsia founder and CEO Tony Fernandes said he has no regrets over a viral LinkedIn post that showed him getting a massage at a meeting. “My famous topless sports massage was all about showing our culture, to be honest, that we had such a flexible culture,” the Malaysian businessman told CNBC.
Pfizer bets on cancer drugs
U.S. pharmaceutical giant Pfizer is betting big on cancer drugs for a turnaround after a sharp fall in its Covid business. The company made its oncology pitch at an investor event last week. Pfizer also rolled out a splashy Super Bowl ad promoting its initiative to “outdo cancer.”
[PRO] Ark Invest’s top AI plays
Innovation-focused Ark Invest is bullish on artificial intelligence amid the frenzy. Tasha Keeney, director of investment analysis and institutional strategies at the asset manager, is “particularly excited about” the autonomous cars segment, which she estimates could be a “$28 trillion opportunity.”
The bottom line
U.S. job growth continues to boom but there are also clear signs the labor market is cooling.
February’s jobs data showed hiring remained robust and steady, which bodes well for the overall economy.
Yet, the jobless rate was higher than expected at 3.9%. And January’s hot reading turned out to be a blip, as it was revised sharply down as well as December’s payrolls figures.
The big question remains what the latest jobs data means for the Fed’s path forward on interest rates.
Last week, Fed Chair Jerome Powell told lawmakers inflation is “not far” from where it needs to be for the central bank to start cutting rates.
“We expect the unemployment rate to rise, starting in the spring, as job growth slows,” wrote Ian Shepherdson, chairman and chief economist at Pantheon Macroeconomics. “Whether this will be apparent in the data quickly enough for the Fed to ease in May is unclear.”
Furthermore, the mixed jobs picture sends conflicting messages on economic activity.
“People will see in the report what they want to see,” Mohamed El-Erian, Allianz chief economic advisor, wrote on X.
“Those fearing an overheating labor market will point to another beat on job creation and higher hours worked,” he said, adding those “seeing a goldilocks labor market will point to the large revisions to the last two employment readings and the modest monthly increase in hourly earnings.”
This contrast will have “no material impact on economic forecasts and policy views,” noted El-Erian.
“It will, however, boost asset prices given the incoming trading/investing mindset that “both good/bad news for the economy is good for markets.”