U.S. jobs report, iPhone sales, midsize bank malaise - what's moving markets

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Investing.com -- The latest U.S. jobs report is set to be the main course for markets on Friday. But in the meantime, investors are picking through Apple earnings that showed a recovery in iPhone sales, all while digesting yet another tumultuous day for regional banks.

1. April jobs report looms

U.S. stocks are pointing higher on Friday, as investors look ahead to the release of key labor market data out of the world's largest economy.

At 05:10 ET (09:10 GMT), the Dow futures contract was up by 112 points or 0.34%, S&P 500 futures traded 20 points or 0.48% higher, and Nasdaq 100 futures gained 64 points or 0.49%.

The monthly nonfarm payrolls report is expected to show that job growth in the U.S. fell in April to its slowest pace since 2020. Economists estimate that 180,000 roles were added last month, down from 236,000 in March. The U.S. unemployment rate is also projected to tick up to 3.6%, while the increase in average hourly wages is seen holding steady at 0.3%.

The numbers are likely to provide some insight into whether the country's labor market is indeed cooling, following a string of aggressive Federal Reserve interest rate hikes. If that proves to be the case, it may give further backing to the Fed's signals earlier this week that is approaching the end of its policy tightening cycle.

2. iPhone sales rebound

Apple's iPhone sales rose in the first quarter, recovering from a recent slump, while the technology giant also saw demand touch record levels in India.

Revenue in the January to March period generated by the iPhone increased by 1.5% compared to the prior year to $51.33 billion, topping Bloomberg consensus estimates of $48.97B.

But sales of Mac computers and iPad tablets both declined and came in under projections, pushing the total top-line result down by 2.5% to $94.84B.

However, this figure still beat expectations, thanks in no small part to India. In a call with analysts, Apple chief executive Tim Cook tipped his cap to double-digit sales in the country, where the company opened two new outlets last month. India, he said, is now a "major focus" for the business.

Shares in Apple (NASDAQ:AAPL), which also announced that it had been authorized to embark on a fresh $90B share buyback over the coming year, gained more than 2% in after-hours trading.

3. Fear and fret around regional banks

The latest casualty of fear gripping the market around midsize U.S. banks was Beverly Hills-based PacWest (NASDAQ:PACW), which saw its shares plummet by more than 50% on Thursday. The bank had said in a statement that it was exploring its strategic options - including (reportedly) a potential sale.

First Horizon (NYSE:FHN) stock also shed a third of its value. The Memphis-based lender and Canada's TD Bank (TSX:TD) made a joint announcement that they were scrapping a planned merger. The two cited lingering uncertainty around when TD would obtain regulatory approval to go ahead with the tie-up.

Western Alliance (NYSE:WAL), meanwhile, slumped by 38%, despite the Arizona-based bank releasing data showing that its deposits have ticked up since the end of March. The group had previously denied a report that it was mulling over a possible sale.

When the dust settled, the KBW Regional Banking index dipped by 3.5% and has now declined by over 30% in 2023.

4. Not-so-Yeezy for Adidas

Adidas chief executive Bjørn Gulden warned on Friday that the German apparel group will post "a bumpy year with disappointing results," suggesting that the impact of its decision to scrap a profitable partnership deal with controversial rapper Ye has yet to be fully realized.

Without the "Yeezy" line of products, sales in the first quarter fell by around €400 million. But the problems don't end there. Adidas has a stock of unsold Yeezy-branded goods and, as analysts noted today, it has not yet said what it plans to do with these items. The company estimates that it will have to eat an operating loss of €700M if it writes off the stock.

Even still, strong demand for Adidas' striped "terrace" shoes helped quarterly operating profit come in above estimates. Shares in Adidas (ETR:ADSGN) gained in early European trading.

5. Oil prices rise, but face weekly decline

Oil prices moved higher on Friday, but remained on pace for a third consecutive weekly loss, as concerns over the U.S. banking system likely exacerbated lingering worries that slowing growth will hit crude demand.

By 05:10 ET, U.S. crude futures traded 1.53% higher at $69.61 a barrel, while the Brent contract climbed 1.60% to $73.66 a barrel.

However, on a weekly basis, Brent was set to close down by more than 7% and WTI was on track to settle 9% lower.

The spotlight is expected to shine on the April U.S. employment data later today, with traders on the lookout for any clues about the overall health of the economy.