(Reuters) -Nasdaq futures fell by almost 1% on Friday after Elon Musk, CEO of Tesla (NASDAQ:TSLA), warned about the future of the economy. This scared investors who were already worried about tighter monetary policies and rising inflation.
Now, everyone will be looking at the monthly jobs report, which will be released at 8:30 a.m. ET, for clues about the future of interest rate hikes as worries about a possible recession grow.
In an email to company executives that was seen by Reuters, Musk said he has a “super bad feeling” about the economy and wants to cut about 10% of jobs at the electric car maker. This happened before the stock market opened.
Nasdaq 100 futures went down after the report and were down 0.9% at the time of this writing.
Fiona Cincotta, a senior financial markets analyst at City Index, said, “Musk tends to say exactly what he thinks and believes, and he does have a good point.”
“Even though the Fed thinks it’s possible for the economy to have a soft landing, I think there are some signs that something might go wrong. The question is whether or not they can be as aggressive as they need to be. Musk doesn’t think they’ll be able to do it without putting the economy into a deep recession.”
This week, JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon said that the problems facing the U.S. economy are like a “hurricane.”
The closely watched report from the Labor Department is likely to show that the number of jobs in the U.S. grew quickly in May, wages went up a lot, and the unemployment rate dropped to its pre-pandemic low of 3.5 percent. All of these are signs of a tight labour market.
Economists polled by Reuters think that nonfarm payrolls rose by 325,000 jobs in May, which would be on top of the 428,00 jobs that were added in April.
Wall Street has been very volatile lately because hawkish comments from Federal Reserve officials kept investors on edge. This was true even though recent economic data showed that inflation may have reached its peak and that the strength of the U.S. consumer was strong.
So far this year, the Dow is down 8.5%, the S&P 500 is down 12.4%, and the tech-heavy Nasdaq is down 21.3%. Rate-sensitive growth stocks have been hit the hardest by the sell-off.
At 7:04 a.m. ET, the Dow e-minis were down 111 points, or 0.33 percent, the S&P 500 e-minis were down 21.75 points, or 0.52 percent, and the Nasdaq 100 e-minis were down 116.5 points, or 0.9 percent.
Lululemon Athletica (NASDAQ:LULU) went up 1.4% after the company raised its full-year forecast due to strong demand for athleisure products and said that COVID-19 lockdowns in China wouldn’t have much of an effect on the company.
Kohl’s Corp (NYSE:KSS) went up by 7.8 percent after the news that private equity firm Sycamore Partners and retail holding company Franchise Group (NASDAQ:FRG) Inc. had made bids to buy the store.
