U.S. employers likely maintained a brisk pace of hiring in December, with expectations for an increase of 190,000 positions for the month. If the Labor Department reports such a figure today, it would take the total number of new jobs in 2017 to 2.11M, ahead of analyst forecasts at the start of the year. The data, along with strong markets and the Dow's record 25,000 milestone, could also pave the way for the Fed to raise interest rates in March.

Economy

Inflation in the eurozone slipped further away from the ECB's target in December, highlighting the challenge facing the bank as it attempts to wind down its QE program. The figure slowed to 1.4% last month from 1.5% in November. Of perhaps more concern to policymakers is the fact that the core rate, which strips out volatile items such as food and energy, remained even lower at 0.9%.

U.S. and South Korean negotiators will meet in Washington today to discuss changes to their free trade deal. The Trump administration previously cast Korus as a failure, noting America's trade deficit with the country has more than doubled since the pact took force in 2012. North and South Korea have also agreed to hold high-level talks next week to discuss the Pyeongchang Winter Olympics, as well as ways to improve their relations.

The U.S. State Department is suspending more than $1B in security assistance to Pakistan until Islamabad takes action against the Afghan Taliban and Haqqani network. The U.S. Treasury separately announced new sanctions on five entities tied to the ballistic missile program in Iran, where over twenty people have been killed and more than 1,000 arrested since economic protests began on Dec. 28.

Looking to boost domestic energy production, the Trump administration has proposed opening nearly all U.S. offshore waters to oil and gas drilling, including in the Atlantic, Arctic and Pacific oceans. That would reverse the Obama-era order placing 94% of the Outer Continental Shelf off limits to drillers. Related tickers: SLM, HAL, DO, ESV, HERO, NE, ORIG, PACD, RDC, RIG, VTG

A severe winter storm canceled thousands of flights, froze pipes and disrupted services at refineries on the U.S. Atlantic coast on Thursday. That sent fuel prices higher, along with a natural gas spike, as heavy snowfall and high winds caused electricity outages. The storm was powered by a rapid plunge in barometric pressure that some weather forecasters referred to as a "bomb cyclone."

Stocks

Security flaw fallout... Intel (NASDAQ:INTC) has issued updates for most of chips it introduced over the past five years, while Apple (NASDAQ:AAPL) said it would release updates to all devices affected by the processor exploits. In other Apple news, App Store sales hit a new record of $300M on New Year's Day, while Billboard reported that music mogul Jimmy Iovine is leaving the tech giant in August.

Will that have a hit on Apple Music? The streaming service recently announced 30M paying subscribers since a June 2015 launch, in part due to Iovine's focus on original content. "Hello 70 million subscribers," rival Spotify (Private:MUSIC) tweeted on Thursday. The Swedish company, valued at as much as $19B last year, is targeting a direct listing in the first half of 2018.

Google has led a $120M investment in livestream mobile game platform Chushou, aiming to expand its services to target more overseas viewers. The investment is Google's (GOOG, GOOGL) second ever in a Chinese startup, as the tech giant looks for new avenues into the Chinese market where its flagship search engine has been blocked by censorship authorities since 2012.

GoPro is in the process of laying off around 200-300 employees this week, according to TechCrunch. The job cuts are largely concentrated in the company's aerial division, the segment responsible for its Karma drone. GoPro (NASDAQ:GPRO) explained that the layoffs are part of a larger restructuring "to better align our resources with business requirements." GPRO +2.6% premarket.

FCC Chairman Ajit Pai has canceled an upcoming appearance at CES, the consumer electronics show that begins in Las Vegas on Jan. 9. The exact nature of the threats remains unclear, but he recently led an effort to roll back net neutrality rules. FCC officials declined to discuss whether the threats might be linked to the campaign.

New Year's resolution... Facebook's (NASDAQ:FB) Mark Zuckerberg sets a personal challenge at the start of every year, and in 2018 that goal includes a cryptocurrency mention. "There are important counter-trends - like encryption and cryptocurrency - that take power from centralized systems and put it back into people's hands. I'm interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services."

Amid growing concerns over cryptocurrency trading, the CFTC will hold meetings this month on the self-certification process used to approve new crypto derivatives. "One thing is certain: ignoring virtual currency trading will not make it go away. Nor is it a responsible regulatory strategy," said Chairman J. Christopher Giancarlo. The CFTC has been increasing its jurisdiction over the crypto market, which has no overriding federal regulator.

In a major step ahead of a planned IPO, Saudi Arabia has changed the status of Aramco (Private:ARMCO) to a joint-stock company. The national oil firm has a fully paid capital of 60B riyals ($16B) divided into 200B ordinary shares, while the board will have 11 members. The government will still remain the major shareholder of Aramco and retain the ultimate decision on national production levels.

Brazilian shareholders of state-controlled Petrobras (NYSE:PBR) are petitioning a local court to be paid on similar terms as those given to U.S. shareholders - an almost $3B deal that marked one of America's largest class action settlements. "After all, the same facts, the same defendants, should have the same consequence, independent of the jurisdiction of the investment," said Andre de Almeida, a lawyer leading the shareholder suit in Brazil.

Attorney General Jeff Sessions has rescinded an Obama-era policy that had discouraged prosecutors in states where marijuana was legalized from bringing pot-related charges, unless they involved distribution to minors, revenue sale benefiting gangs and a few other federal priorities. In its place, prosecutors will be given discretion (not guidance) to pursue marijuana-related prosecutions.

Surf's up! Billabong (OTCPK:BLLAY) has agreed to a buyout from its top shareholder and major lender Oaktree Capital. "It's a difficult retail outlook, but it's probably the perfect time to be picking it up at the bottom of the market, said Mathan Somasundaram, market strategist at Blue Ocean Equities. The deal values Billabong at about A$197.7M ($155M), compared to its peak of A$3.8B in 2007.

Unlike some retailers, store closures will be a marker of strength for Walmart (NYSE:WMT), according to former Walmart.com CEO Carter Cast. "I believe Walmart will continue to use the internet and grow their e-commerce sales from about 4%-5% to well over 10%," he told CNBC. "There is no question, there is too much square footage in the industry now."

More closings for Sears Holdings... An additional 100 Kmart (NASDAQ:SHLD) and Sears stores will be shuttered this year, all of which are expected to closed between early March and April. "We will continue to transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members," the company said in a statement.

It looks like a rethink for Travis Kalanick, who has long boasted that he's never sold any shares in the company he co-founded. The former CEO of Uber Technologies (Private:UBER) is selling nearly a third of his 10% stake in the ride-services firm for about $1.4B, Bloomberg reports. Kalanick’s sale is part of a deal struck by a consortium led by SoftBank (OTCPK:SFTBY), which is taking a 17.5% stake in Uber.

Brazil will give its "blessings" to any "partnership or joint venture" between Embraer (NYSE:ERJ) and Boeing (NYSE:BA), but would rule out any proposal that involves a change of ownership, Defense Minister Raul Jungmann told the FT. Brazil's government has also set up a group to "accompany this negotiation," including ministries of defense and finance, the air force and national development bank BNDES, which holds a stake in Embraer.

Today's Markets

In Asia, Japan +0.9%. Hong Kong +0.3%. China +0.2%. India +0.5%.
In Europe, at midday, London +0.4%. Paris +0.8%. Frankfurt +1.1%.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +0.4%. Crude -0.9% to $61.44. Gold -0.3% to $1317.80. Bitcoin +5.8% to $16029.
Ten-year Treasury Yield +1 bps to 2.47%

Today's Economic Calendar

8:30 Non-farm payrolls
8:30 International Trade
10:00 Factory Orders
10:00 ISM Non-Manufacturing Index
10:15 Fed's Harker: Economic Outlook
12:30 PM Fed's Mester speech
1:00 PM Baker-Hughes Rig Count
10:15 Fed's Mester Speech on Saturday