Rise and shine everyone.

It’s Jobs Friday! With the Fed meeting out of the way, and Chair Powell once again reconfirming that a rise in unemployment could lead to sooner rate cuts, there are more people watching the report than ever before.

US Equity Futures rallied yesterday, carrying on from the Fed’s dovish meeting the day before. Apple’s earnings, of course, sealed the deal and today we’re seeing futures trading much higher in the pre-market.

It would seem that the Japanese Yen has seen another round of intervention, with the USD/JPY falling to 153 from 158.

And last but not least, Fed Speakers are back - we have Goolsbee and Williams speaking tonight.

US Employment Report

Over the last quarter, we’ve been seeing the Non-Farm Payroll reading continue to surprise to the upside. Today’s estimates are:

Goldman Sachs seems to think that the NFP number will come in higher - they are estimating 275k because according to their research, seasonal factors have become more and more favorable in April in recent years.

There has been a notable discrepancy between the Non-Farm Payroll (NFP) data from the establishment survey and the weaker employment data from the household survey, which has shown significant declines in some recent months, including a notable decrease of almost 700,000 in December, despite a rebound in March.

The differences between these surveys, such as the household survey counting the number of people with jobs (including multiple jobholders) versus the establishment survey counting the total number of jobs, might explain some of the divergence. Additionally, factors like immigration might also play a role. Despite the pessimistic view from the household survey, the reality of the labor market's condition is likely not as weak, with the actual situation probably falling somewhere between these two survey results.

Apple Earnings

Looks like Apple is back to their old ways! They announced a $110B buyback and increased dividends, which helped increase the stock after hours. Revenue declines were also not as bad as expected and that gave the price a further boost.

1. Earnings and Revenue: The company exceeded earnings expectations, reporting $1.53 per share versus the expected $1.51. Revenue also topped expectations at $90.8 billion compared to the forecasted $90.0 billion.

2. Share Buyback and Dividend Increase: They announced a significant share buyback plan of up to $110 billion, which is about 4% of the company's market cap, and raised the quarterly dividend by 4.2%. Both moves are likely to be well-received by investors as they return value to shareholders.

3. Product and Financial Metrics:

   • Gross Margin: Improved year-over-year to 46.6% from 44.3%, which indicates better profitability.

   • iPhone Revenue: Dropped to $46.0 billion from $51.3 billion the previous year, marking the biggest decline since the pandemic and meeting expectations.

   • iPad Revenue: Fell to $5.56 billion from $6.68 billion year-over-year, slightly below expectations.

   • Mac Revenue: Increased to $7.5 billion from $7.2 billion year-over-year, beating expectations.

   • Services Revenue: Grew significantly to $23.9 billion from $20.9 billion year-over-year, surpassing forecasts.

   • Wearables, Home & Accessories Revenue: Declined to $7.91 billion from $8.76 billion year-over-year, below expectations.

   • Regional Sales:

     • Greater China's revenue was down 8.1% year-over-year to $16.4 billion, but still above expectations. Notably, iPhone sales in China grew year-over-year.

     • Europe showed modest growth with revenue of $24.1 billion, slightly above the previous year's $23.9 billion.

4. Future Outlook: The company is looking forward to announcing new products next week, which might include updates to existing lines or entirely new products.

USD/JPY falls again

It seems like there has been a sharp decline in the USD/JPY exchange rate from 158.00 to 153.00, indicating a potential episode of FX intervention by Japanese officials. While there hasn't been official confirmation from authorities, news reports and analysis suggest that the Bank of Japan might have sold around $23 billion.

This comes after expectations of intervention earlier in the week, rumored to be around $30 billion. To put these numbers into perspective, Japan sold around $42 billion over four days in October 2022, and around $29 billion in September 2022. The suspected intervention this time might be slightly larger so far.

Chart of the Day - BofA’s Flow Show

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Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)