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Wall Street… Breakfast

Today’s employment figures from the Labor Department will show how the economy fared last year as a whole and how much momentum it’s carrying into 2016 – a major factor that could influence the timing of upcoming rate hikes. U.S. employers likely maintained a fairly strong pace of hiring in December, with non-farm payrolls gains of 200K and an unemployment rate unchanged at 5%, underscoring the economy’s healthy fundamentals despite a sputtering manufacturing sector. The data will be published at 8:30 a.m. ET.

Today’s Markets

In Asia, Japan -0.4% to 17698. Hong Kong +0.6% to 20453. China +2% to 3186. India +0.3% to 24934.
In Europe, at midday, London +0.2%. Paris -0.2%. Frankfurt +0.2%.
Futures at 6:20, Dow +0.7%. S&P +0.8%. Nasdaq +0.9%. Crude +0.2% to $33.34. Gold -0.7% to $1099.70.
Ten-year Treasury Yield +1 bps to 2.16%

Economy

U.S. futures are in rebound mode, led by strong gains from battered Chinese stocks, after Beijing suspended its controversial market circuit breaker and set a firmer yuan midpoint rate for the first time in nine days. Rumors are also swirling that China intervened to prop up its markets for at least the second time since Monday as state-controlled funds bought equities. Although the Shanghai Composite ended the session up 2% at 3,186, it’s still down a whopping 10% for the week.

Following North Korea’s fourth nuclear test, the Obama administration told China that its approach for dealing with Pyongyang hasn’t been successful, as Congress readied a new round of sanctions that could hit Chinese banks. “China had a particular approach that it wanted to take and we agreed to give them the space to be able to implement that, but today…I made it very clear that has not worked,” Secretary of State John Kerry declared. China is North Korea’s main economic and diplomatic backer, although relations between the two Cold War allies have cooled in recent years.

Growth in German imports outstripped exports in November and industrial output fell, suggesting Europe’s largest economy may have decelerated at the end of 2015. Seasonally adjusted exports inched up 0.4%, while imports rose 1.6%, narrowing the country’s trade surplus to €19.7B. Output, adjusted for seasonal swings and inflation, slid 0.3% from October, as a slowdown in emerging markets weighed on economic growth.

The Swiss National Bank incurred a record loss of 23B francs ($23B) last year after the central bank’s costly decision to abandon its currency cap against the euro. While the appreciation of the franc that followed the Jan. 15 decision resulted in a loss of 20B francs on its foreign-currency positions, the SNB still plans a payout and dividends to the federal government and cantons.

Stocks

Saudi Arabia is considering an IPO of Saudi Aramco, the world’s biggest crude producer, deputy crown price Mohammed bin Salman said in an interview with The Economist. That move could bolster the Kingdom’s coffers at a time when oil prices continue to slide, recently hitting lows not seen in over a decade. Saudi officials estimate the company is worth “trillions of dollars,” which would make it worth at least double Apple’s (NASDAQ:AAPL) $561B market cap; in the energy sector, Exxon Mobil’s (NYSE:XOM) current market cap is $323B.

Puerto Rican bonds insurers, Assured Guaranty (NYSE:AGO) and Ambac Financial (NASDAQ:AMBC), are suing the U.S. commonwealth over its recent debt default, kicking off a long-expected court battle between the island and its financial creditors. The lawsuit asks a judge to declare that Puerto Rico violated the U.S. constitution when it repurposed $163M from revenue streams meant to pay debt at the island’s infrastructure, highway and other agencies.

Laying out more driverless goals, Renault (OTCPK:RNLSY) and Nissan (OTCPK:NSANY) have confirmed plans to launch 10 car models equipped with autonomous drive technology within five years. CEO Carlos Ghosn laid out the following milestone schedule: The plan kicks off this year with “single-lane control” and expands into “multiple-lane control” by 2018. Owners will then have the technical freedom to go hands-off with “intersection autonomy” by 2020.

Shares of Apple suppliers tanked after Thursday’s closing bell, following warnings from Cirrus Logic (CRUS -1.1%) and Qorvo (QRVO -11.3%) about soft Q4 and Q1 sales. The alerts come in the wake of reports indicating Apple (AAPL) has cut iPhone production and component orders. In after-hours trading: Skyworks (NASDAQ:SWKS) -4%; Avago (NASDAQ:AVGO) -4.3%; NXP (NASDAQ:NXPI) -1.6%.; InvenSense (NYSE:INVN) -2.5%; Broadcom (NASDAQ:BRCM) -1.3%; Synaptics (NASDAQ:SYNA) -1.7%; Jabil (NYSE:JBL)-0.7%.

Meanwhile, Apple has bought a start-up that uses artificial intelligence software to analyze emotions from facial expressions, marking the company’s third AI-related acquisition in the last three months. Emotient has mostly worked with advertisers to help them gauge consumer reactions to their ads, but many other uses for its technology are also possible, such as virtual reality. Despite the purchase, Apple (AAPL) shares closed below $100 yesterday for the first time in 15 months.

Weak smartphone and TV demand have also been weighing on Samsung Electronics (OTC:SSNLF), prompting the tech giant to anticipate another year full of missed estimates. Samsung expects to report a Q4 operating profit of 6.1T won ($5.1B), up 15% Y/Y but below a consensus of KRW6.6T, while revenue likely rose 0.5% to 53T won, slightly below a KRW53.8T consensus.

In line with the broader market selloff, BlackBerry (NASDAQ:BBRY) slid to its worst day in almost a year on Thursday after CEO John Chen said the smartphone maker would unveil at least one more Android device this year. Shares fell 8.5% to $8.00, their biggest decline since January 2015. New handsets indicate more costs and less profitability in an industry where BlackBerry’s global market share has slipped below 1%.

Shire is preparing to announce its roughly $32.B acquisition of Baxalta (NYSE:BXLT) as early as Monday, according to Reuters. The cash-and-stock deal will value Baxalta at around $48 per share, with a cash component just shy of $20. A deal would be one of the healthcare sector’s largest mergers in 2016. SHPG +2.6%; BXLT +0.9% premarket.

Set to emerge from bankruptcy this month, American Apparel (NYSEMKT:APP) has received a takeover bid of more than $200M from an investor working with ousted CEO Dov Charney, Bloomberg reports. If the retailer and creditors accept the offer, the plan would be for Charney to return in some capacity to the company. If they refuse, Charney and his financial backer would then need to persuade the judge to reject American Apparel’s reorganization plan.

FedEx and TNT Express have obtained unconditional EU antitrust approval for their proposed €4.4B ($4.8B) tie-up. “The European Commission has concluded that the deal does not raise any competition concerns,” they said in a statement. The TNT Express (OTCPK:TNTEY) deal should catapult FedEx (NYSE:FDX) to second place in Europe behind Deutsche Post’s (OTCPK:DPSGY) DHL.

Much less sludge was spilled than first estimated from a dam burst at a Brazilian iron ore mine last November which killed 17 people and left hundreds homeless. Satellite assessments showed about 32M cubic meters of sludge was released into the Rio Doce river, co-owner BHP Billiton (NYSE:BHP) said, citing information from mine operator Samarco, its joint venture with Vale (NYSE:VALE). “The amount of tailings released is therefore significantly less than some initial estimates which were in excess of 50M cubic meters.”

Royal Dutch Shell is confident that shareholders will approve its takeover bid for BG Group (OTCQX:BRGYY) at a Jan. 27 meeting, FT reports, even as crude oil prices languish near 12-year lows and several large Shell (RDS.A,RDS.B) investors privately voice concerns over the economics of the proposed takeover. FT also suggests that proxy adviser ISS will recommend the deal.

Boeing has confirmed it set a new record for commercial aircraft deliveries in 2015 with 762, topping projected deliveries of 750-755 units, as well as its previous commercial delivery record of 723 in 2014. The total should mean that Boeing (NYSE:BA) will retain its delivery crown over Airbus (OTCPK:EADSY), although the latter’s 2015 orders have flown way ahead of the U.S. planemaker.

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