The U.S. Added 266,000 Jobs Last Month, Far Surpassing Expectations

Plus, China is waiving tariffs on pork and soy imports from the U.S., OPEC+ announced another round of production cuts, and Morgan Stanley just upped its bull case for Tesla.

Stocks jumped in their last session of the week with the Dow surging 300 points, or 1.1%. The S&P 500 and Nasdaq both gained 0.9%.

The U.S. added 266,000 jobs in November, far surpassing economists’ expectations for a gain of 187,000 jobs. According to the report released by the Labor Department, also noted the unemployment rate fell to 3.5%, the lowest level since 1969. The jobs growth number was the highest since January’s 312,000. “It’s a significant surprise because economists were ready to go with the idea that payroll growth was slowing down because the job market had gotten tight,” said Stephen Stanley, chief economist at Amherst Pierpont. “The whole tenor has changed in terms of job growth. We’re back at steady-as-she-goes at a robust pace.”

China is waiving retaliatory tariffs from the trade war on imports of pork and soy from the U.S. China’s finance ministry said that it is processing waiver applications after local firms purchased a certain amount of the U.S. goods based on need. White House National Economic Council director Larry Kudlow also said this morning that the U.S. and China are “close” to a trade deal, though he said the administration is prepared to walk away if it doesn’t get the terms it’s seeking. “The president has said many times if the deal is no good, if the assurances with respects to preventing future thefts, if the enforcement procedure is no good he has said we will not go for it. We will walk away,” Kudlow told CNBC. “The president has said that if we can not get the enforcement and the assurances, then we will not go forward.” Kudlow added, “The deal is close. It’s probably even closer than in mid-November. Deputy level met again … The reality is constructive talks, almost daily talks. We are in fact close… There’s no arbitrary deadlines, but the fact remains December 15 is a very important date with respect to a no go or go on tariffs.”

OPEC and its non-OPEC allies, also known as OPEC+, agreed to deepen their oil production cuts by an additional 500,000 barrels per day through March 2020 at its biannual meeting in Vienna, Austria today. The agreement will see OPEC+ reduce total oil output by 1.7 million barrels per day. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman also said that the oil-rich kingdom’s quota would be an additional 167,000 barrels per day through March 2020, when the cartel will hold its next meeting. Abdulaziz also said that Saudi Arabia would also extend its voluntary cut of 400,000 barrels per day, making OPEC+’s total cuts amount to 2.1 million barrels per day, though he cautioned that the alliance will only be able to achieve this target if the other countries improve their compliance.

Uber shares are down more than -2% this morning after the ride-hail company said it found more than 3,000 allegations of sexual assault involving its drivers or passengers in the U.S. in 2018. In its U.S. Safety Report, published late yesterday, Uber said that it had received 235 reports of rape in 2018, 92% of which were allegedly committed by the firm’s drivers. Uber also outlined the actions it is taking to prevent cases of sexual abuse and assault by its drivers and riders. Among those steps that it has taken, it is making driver background checks more rigorous to “continuously look for new criminal offenses,” has added new technology that allows the company to check in on riders if they detect an unexpectedly long stop during their trip, has given riders the ability to report safety incidents to Uber before their trip is over, and has added an “In-App Emergency Button” and a way to text 911 operators directly from the app.

Tesla shares are up today after Morgan Stanley increased its “bull case” for the electric auto maker to $500 a share after hours yesterday. Morgan Stanley analyst Adam Jonas said, “in an optimistic scenario,” he sees Tesla selling 100,000 of its new Cybertrucks by the end of 2024 at an average price of $50,000 per vehicle. Jonas also said that he believes Tesla’s Gigafactory in China could perform better than anticipated and reach a production rate of 450,000 units a year by 2024/2025. “To be clear, we are not bullish on Tesla longer term, especially as, over time, we believe Tesla could be perceived by the market more and more like a traditional auto OEM [original equipment manufacturer]; we are prepared for a potential surge in sentiment through 1H20 but question the sustainability,” Jonas said.

Stocks We’re Watching

Maverix Metals Inc (OTC: MMX): Shares of this gold-focused royalty and streaming stock are up 12% this week after it announced that it has entered into a definitive agreement to acquire a portfolio of 25 precious metals royalties from Kinross Gold Corp. Maverix CEO Do O’Flaherty said, “This transaction is another milestone in Maverix’s continued growth. We would like to thank Kinross for entrusting us to deliver superior value for their royalty portfolio. This transaction further validates our business model and growth strategy, and we welcome Kinross as a significant shareholder.”

Verint Systems Inc (NASDAQ: VRNT): Verint Systems shares jumped as much as 16% yesterday following the company’s announcement that its board has approved a plan to splint into two publicly-traded companies “shortly after” the end of Verint’s fiscal year in January 2021, one focused on its consumer engagement business and the other on cyber intelligence. “With our customer engagement business approaching $1 billion in annual revenue and our cyber intelligence business approaching $500 million in annual revenue, we believe the two independent, publicly traded companies will both benefit from the separation and be well positioned to pursue their own strategies, drive opportunities to accelerate growth and extend their market leadership,” said Verint CEO Dan Bodner in a statement.