Employment report, Nike's difficulties in China, Burger King's franchise bets, and other key points Morning Squawk
CNBC
56m ago
Ai Focus
CNBC The Morning Squawk briefing states that the market is awaiting the September non-farm payroll report; Nike's stock price fell due to revenue falling short of expectations and its Chinese business dragging down performance; General Motors' sales volume in the third quarter decreased year-on-year, with sales of electric vehicles also generally declining; OpenAI Chairman Bret Taylor discussed AI safety responsibilities; Burger King continues to advance the conversion of more stores to franchise operations.
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Happy Friday. If you missed it yesterday: After the Ministry of Finance proposed this change earlier this week, over 60 million children have been automatically included in Trump Accounts. CNBC has compiled the information that parents need to know about Jessica Dickler and Kate Dore.

U.S. stock futures rose across the board this morning. The three major indices closed slightly higher yesterday.

Here are five things investors need to know before the start of trading days:

Will there be a significant rebound in September?

Today is "Employment Day," and Wall Street expects that the September non-farm payroll report will show continued employment growth for another month. If these predictions come true, this data could provide a positive signal for what is known as a labor market with "low hiring and low layoffs."

What needs to be understood is:

  • Economists expect the report to show that 84,000 new jobs were created last month, and the unemployment rate will remain at 4.1%.
  • As written by Jeff Cox of CNBC, Federal Reserve officials have always cited the stability of the labor market as a reason not to rush to raise interest rates again, despite inflation still being on the high side.
  • The private sector employment report for September, released earlier this week by ADP, was better than economists' expectations, showing an increase of 90,000 jobs in corporate employment that month.
  • Despite the stock market closing higher on Thursday, all three major indices were expected to record weekly declines before the release of this report this morning.
  • Meanwhile, U.S. Treasury yields remained flat this morning, after the yield on 10-year Treasuries hit a 24-year high yesterday. The price of Brent crude oil rose by 4% yesterday, but fell by 3% overnight following reports of diesel and crude oil inventory releases.
  • Click here to view real-time market updates.

2. Mistake

Nike's stock price fell by more than 8% this morning after the sports retail giant reported revenue in its first fiscal quarter that fell short of expectations. The company also announced a restructuring plan yesterday, which is said to result in job cuts next year.

Nike stated that its business in China dragged down performance for that quarter, while revenue in North America was slightly better than expected. For the full year ending fiscal year 2027, Nike expects its revenue to decline by a high single-digit percentage.

However, there was also a highlight on Thursday: the sneakers launched by WNBA celebrity Caitlin Clark in collaboration with Nike were nearly sold out within two hours of their release in the United States yesterday. CEO Elliott Hill stated during yesterday's earnings call that "one of Nike's strongest growth opportunities is women's sports."

3. Short circuit

General Motors stated that its sales volume in the third quarter decreased by 5.5% year-on-year, with new vehicle sales for that quarter slightly falling below 671,000 units; at the same time, sales of its all-electric vehicles also saw a comprehensive decline.

Last year at this time, this automobile manufacturer set a record for electric vehicle sales, only for the Trump administration to later cancel federal incentives for purchasing such cars. Now, as Michael Wayland and Catriona Marangi have written, with hybrid vehicles becoming increasingly popular, General Motors' relatively limited hybrid product line is expected to hold back the company.

In fact, hybrid vehicles helped Toyota and Honda exceed General Motors in sales volume in the third quarter. Meanwhile, Stellantis indicates that their sales volumes were roughly the same as those of the same period last year, while Nissan and Kia's sales volumes increased by about 1% and 8% respectively.

4. Discuss AI

As debates surrounding the risks and regulation of artificial intelligence continue to intensify, OpenAI Chairman Bret Taylor stated yesterday at the AI Forum in CNBC that the company "has an obligation" to ensure the security of its technology. He added that people should be "very pleased that the laboratories are asking themselves these difficult questions," referring to the calls from AI leaders to slow down development.

Meanwhile, AT and the person in charge of AI, Andy Markus, stated that this telecommunications giant uses 45 billion AI tokens per day: "Even at this level, we are still able to obtain investment returns, but we must control these costs," he told the Scott Wapner of CNBC.

5. The Pearl on the Crown

As part of its efforts to turn around losses, Burger King is converting hundreds of its directly-operated stores into franchise businesses, focusing on selecting franchisees who live near the restaurants and are frequent visitors.

In the end, Burger King hopes to retain about 300 of its own-operated restaurants in the United States, with the remaining more than 6,000 owned by franchisees. As CNBC's Amelia Lucas writes, this means that the future of this business depends on these owners.

The President of Burger King in the United States, Tom Curtis, said, "The franchise contract is for 20 years. The average duration of marriages in the United States is 8.2 years. So you must get it right."

Daily Dividends

Here are several reports worth reviewing this weekend:

  • Wal-Mart is using glowing digital shelf tags to help shoppers and employees find products.
  • The next batch of OpenAI and Anthropic may enter the retail market directly.
  • David Ellison appoints Ynon Kreiz as Co-CEO of Paramount and Warner Bros. Exploration
  • The United States has just significantly lowered the barriers for retail investors to enter the private equity market.
  • OpenAI follows Meta into the hot market of personal proxies. Will users be willing to pay?
  • United Airlines is becoming more aggressive in the battle for top passengers from Delta Air Lines and American Airlines.
  • Trump may target three Federal Reserve governors. Removing them could be more difficult than it seems.

CNBC's Jeff Cox, Davis Giangiulio, Ananya Chetia, Spencer Kimball, Sam Meredith, Laya Neelakandan, Jessica Golden, Catriona Marangi, Michael Wayland, Ian Thomas, Colleen McKown, CJ Haddad, and Amelia Lucas have contributed to this report.

Caleigh Keating assisted in the production of this briefing. Josephine Rozzelle edited the content of this issue.

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