Wall Street Breakfast Podcast: Labor wins landslide victory

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Labour wins UK election in landslide (0:22). Bitcoin drops below $58,000 (1:15). Honda, Nissan consider collaboration (1:50). June nonfarm payrolls expected to reflect labor market slowdown (2:20).

This is an abridged transcript of the podcast.

US markets were closed yesterday for the US Independence Day holiday. And today, 14 years of Conservative rule came to an end in the UK after Labour won the UK general election, with Keir Starmer as the new Prime Minister. He was given a powerful mandate with 408 of 650 seats in parliament, winning 209 seats in the last vote, according to the latest exit polls.

With net debt almost equal to annual economic output, Labour has pledged to close the public spending gap but will need to find new funds to revive the economy and the national health system. It has also outlined supply-side reforms, such as making infrastructure easier and cheaper to build, as well as investment in green energy and a New Deal for workers. On trade, Starmer has ruled out joining the EU single market or customs union, although he will look at ways to remove some of the trade barriers with the bloc.

Bitcoin (BTC-USD) fell below $58,000 on Thursday for the first time since early May, amid concerns that Mt. Gox will distribute a large amount of BTC to its creditors. The German government has also moved its BTC stash to cryptocurrency exchanges.

“Among the main reasons for the price drop was the German government transferring over $50 million to cryptocurrency exchanges, creating selling speculation in the market,” said Lucy Hu, senior analyst at Metalpha.

Earlier today, BTC had also fallen below the 200-day moving average.

Honda Motor (NYSE:HMC) and Nissan Motor (OTCPK:NSANF) are in talks to jointly develop operating systems and other automotive software in a bid to cut costs, Nikkei reported Thursday.

The two Japanese automakers could also work together to strengthen charging infrastructure to increase their competitiveness in electric vehicles, the report notes.

The U.S. Labor Department’s June nonfarm payrolls report, due Friday, is expected to be mixed, with growth expected to continue but at a slower pace than in previous months.

The data is expected to continue showing growth, economists expect. That would follow a pick-up in job growth seen the previous month, with nonfarm payrolls increasing by 272,000 in May. That’s higher than the 182,000 expected and the 165,000 recorded in April.

Stock index futures traded cautiously on Friday as investors kept their eyes peeled for a key jobs report, a day after markets returned from the July 4 holiday.

S&P 500 (SPX) futures were flat, while the Nasdaq 100 (US100:IND) futures rose 0.1% and the Dow (INDU) futures rose 0.1%.

The 10-year Treasury yield (US10Y) fell 3 basis points to 4.35%. The 2-year yield (US2Y) fell 3 basis points to 4.70%.

Traders also watched the end of 14 years of Conservative rule in the UK after Labour won the general election by a landslide, with Keir Starmer becoming the new prime minister.

“The main event to watch today is the US jobs report for June. This will be a particularly interesting report as the June survey data we have so far is weaker than expected, with ISM manufacturing and services figures in contraction territory,” said Jim Reid of Deutsche Bank.

The June nonfarm payrolls report is due out before the bell and is expected to show a decline to 191,000. The unemployment rate is expected to remain at 4%.

Here are some of the stocks that gained the most on Friday:

The biggest stock market gains

• Macy’s (NYSE:M) shares rose 3% after an investor group led by Arkhouse Management and Brigade Capital Management raised its buyout offer for the second time to $24.80 per share, valuing the company at about $6.9 billion, according to people familiar with the matter. The revised proposal seeks to acquire Macy’s (M) shares not already held by the investor group, after their previous offers of $24 in March and $21 in December were rejected.

Friday Economic Calendar

• 08:30 Employment situation
• 1:00 p.m. Number of Baker-Hughes platforms
• 4:30 p.m. Fed Balance Sheet

Editor’s Note: This article discusses one or more securities that are not traded on a major U.S. exchange. Be aware of the risks associated with these securities.