US jobs report surprise shifts Fed cut odds

Good morning. Here's what happened overnight and what you need to know today.

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1.

Jobs jolt: US employers added 254,000 jobs in September, significantly beating expectations and showing resilience in the economy, data released by the US Bureau of Labor Statistics on Friday showed. The data moved bets on Fed funds futures sharply towards a 25-basis-point cut in November, down almost 10 basis points from before the report, according to Bloomberg. It also pushed US shares higher, with the Dow Jones Industrial Average rising 0.81% to close at a new record high. The numbers exceeded the 140,000 jobs forecast by economists surveyed by Reuters and were higher than the revised figure of 159,000 jobs added in August. There were upward revisions to the data from the past two months. The unemployment rate was also lower at 4.1%, below estimates for a steady rate of 4.2%. Wage growth also increased by 4% year-on-year, the data showed. (Capital Brief)

2.

Trade relief: US East and Gulf coast ports reopened on Friday (Saturday AEST) after a three-day strike was suspended until 15 January, allowing workers to clear a backlog of goods and over 40 ships waiting offshore. The suspension eases pressure on ports managing about half of US cargo traffic, just in time for the crucial holiday shopping season. Workers returned under a tentative deal offering a 62% wage increase over six years, raising hourly pay from USD39 ($57) to USD63, The Wall Street Journal reported. The union had sought a 77% wage hike and a ban on port automation, seen as a threat to job security. The old contract, which expired on 30 September, will remain in effect until January. The deal hinges on dockworkers agreeing to efficiency improvements. Shares of major shipping firms, including Maersk, Hapag-Lloyd and Cosco, fell due to expected cost increases and dashed hopes for higher freight rates amid the strike. (Capital Brief)

3.

Trump’s Musk: Elon Musk joined Donald Trump at a rally in Butler, Pennsylvania, where the Republican presidential candidate survived an assassination attempt in July. Wearing a black MAGA cap and joking about being “dark MAGA,” Musk said Democrats would threaten democracy, free speech and gun rights. He echoed Trump’s calls to "Fight! Fight! Fight!" and said that if Trump does not win, it would be “the last election.” In his hour-and-a-half-long speech, Trump revisited the assassination attempt, rallied his supporters with overblown claims about immigration and crime rates, and continued to push false claims of election fraud. A new line of attack focused on what Trump said was Vice President Kamala Harris’ bungled response to tropical storm Helene, which at the latest count had killed 227 people across six states, according to a tally by CNN. (Capital Brief)

4.

ME conflict: Israeli airstrikes pounded Hezbollah targets in southern Beirut including hits near Lebanon’s only international airport, in the fiercest bombardment since last month’s escalation against the Iranian-backed militant group, Reuters reported citing witnesses. A separate strike in Gaza killed at least 26 people and injured 93, as Israeli airstrikes hit a mosque and a school housing displaced people early on Sunday, the news agency said citing the Hamas-controlled Gaza government. The Israeli military said the strikes targeted Hamas terrorists. Iran halted some flights overnight from airports in its western and southern regions due to "operational restrictions," amid heightened tensions following Israel’s threats of retaliation for recent missile attacks. Meanwhile, French President Emmanuel Macron called for a “halt to arms exports for use in Gaza,” to avoid escalating tensions in the region. Meanwhile, thousands of pro-Palestinian demonstrators gathered in major cities over the weekend, calling for a ceasefire ahead of the first anniversary of Hamas' 7 October attack on Israel. Smaller pro-Israeli counterdemonstrations also took place, while the Jewish community also gathered at several worldwide events. (Capital Brief)

5.

EV tariffs: Volkswagen CEO Oliver Blume has warned that the upcoming EU tariffs on China-made electric vehicles could lead to retaliatory measures from Beijing, harming European automakers. The European Commission on Friday (Saturday AEST) voted to impose tariffs of up to 45% on Chinese EVs after an anti-subsidy investigation found evidence of unfair support. Blume said companies investing and creating jobs in Europe should receive tariff exemptions. Germany and German automakers, including VW, opposed the EU’s tariff plan, citing potential damage to the auto industry. Blume highlighted that these retaliatory tariffs could hurt brands like Audi, Porsche and Lamborghini, particularly in the Chinese market. The tariffs are set to begin next month and will last for five years. (Bloomberg)(Reuters)

6.

Wiretap breach: Chinese hackers breached US broadband providers, including Verizon, AT&T and Lumen Technologies, gaining access to wiretap systems used by the federal government for court-authorised network wiretapping requests, The Wall Street Journal reported citing unnamed sources. The intrusion, attributed to the China-linked hacking group Salt Typhoon, is considered “a potentially catastrophic security breach” the people said. Investigators are still determining the extent of the breach, which may have lasted for months and affected a wide range of internet traffic, the sources said. The attack could have included data related to court-authorised US communications requests and potentially involved systems outside the US. The Chinese government denied involvement. The attack adds to a string of reported Chinese hacking campaigns, including the previously disrupted Volt Typhoon, which targeted critical US infrastructure. (WSJ)

7.

Foxconn haul: Foxconn, the world’s largest contract electronics maker, posted a record-breaking Q3 revenue of T$1.85 trillion ($85.03 billion), driven by robust AI server demand. That was also a 20.2% year-on-year surge, exceeding both the company’s expectations and forecasts. Foxconn's cloud and networking products division, supported by clients like Nvidia, saw strong growth. However, the consumer electronics segment, which includes Apple’s iPhones, showed flat year-on-year performance despite strong quarterly growth. September’s revenue alone was up 10.9% from the previous year, reaching T$733 billion. Foxconn expects Q4 to meet current market expectations, while its shares have risen 86% year-to-date, far outperforming Taiwan’s broader market. (Reuters)

8.

AI reels: Meta unveiled Movie Gen, an AI model designed to generate realistic videos and sound effects in response to user prompts, positioning it as a competitor to OpenAI and ElevenLabs. The tool creates video clips up to 16 seconds long and audio up to 45 seconds, allowing users to create and edit videos, such as changing backgrounds or adding objects. While Meta is not releasing Movie Gen for open use, it plans to integrate the tool into its products next year, it said. Meta said it built Movie Gen using a mix of licensed and publicly available datasets. (Reuters)