Wall Street is looking to reverse the worst first quarter decline for the S&P 500 in two years Friday as traders brace for the crucial March jobs report.
Updated at 8:47 am EST
U.S. equity futures moved higher Friday, following on from the worst quarterly performance for the S&P 500 in at least two years, as investors tracked movements in the bond market, as well as headline risk from Europe, ahead of today’s crucial March employment report.
The spread between 2-year and 10-year Treasury note yields, inverted for a third time this week following the March jobs report, which showed fewer-than-expected new positions were added last month, but also a big decline in the headline unemployment rate, as well as rising wages, that indicated extended strength in the country’s labor market.
Benchmark 2-year Treasury note yields rose to 2.422%, just head of the 2.415% rate on 10-year notes, as the the market’s go-to recession warning continues to flash red.
The wage portion of today’s reading could be crucial as investors may see further suggestions of stagflation (slowing growth with higher inflation) as the U.S. Treasury bond yield curve inverts and GDP forecasts are revised downward.
Global factory activity, in fact, may justify some of the bond market’s concerns, with S&P Global’s final reading for Europe falling to a 14-month low in March, with declines in major economies recorded in Asia as well.
Sentiment in Europe was also hit by a record high reading for regional inflation, which accelerated to 7.5% last month, adding further pressure to the European Central Bank’s accommodative stance on interest rates.
Staying in Europe, Russian President Vladimir Putin’s deadline for payment of natural gas exports in rubles came and went Friday, with supplies reportedly still flowing into Germany and elsewhere, while another round of peace talks between Moscow and Kyiv, this time via video link, was scheduled for later today.
Elsewhere, Global oil prices slipped lower, pulling U.S. crude fell below the $100 per barrel mark, following President Joe Biden’s historic move to release 180 million barrels from the Strategic Petroleum Reserve.
Biden’s move, the biggest on record, will add 1 million barrels of crude to the market each day, spread over six months, as part of his administration’s effort to reduce the impact on gas and energy prices from Russia’s war on Ukraine.
WTI crude futures for May delivery were marked $1.33 lower from Thursday’s close at $98.95 per barrel in overnight trading, while Brent contracts for June, the new global pricing benchmark, fell 94 cents to trade at $103.75 per barrel.
On Wall Street, futures contracts tied to the Dow Jones Industrial Average indicating a 170 point opening bell gain while those linked the S&P 500, which ended the first quarter with a 4.95% decline, are are priced for a 20 point gain ahead of the March jobs report.
Futures linked to the tech-focused Nasdaq are looking at a 75 point opening bell advance.
In terms of individual stocks, GameStop (GME) – Get GameStop Corp. Class A Report shares surged 15% after the video-game retailer unveiled plans to seek investor approval for an undefined stock split.
GameStop said the split, which will broadly raise the number of Class A shares from 300 million to 1 billion, would allow for “flexibility for future corporate needs” for the Grapevine, Texas-based group. The plan will be put to shareholders at its annual general meeting later this year.
Dell Technologies (DELL) – Get Dell Technologies Inc Class C Report shares moved 1% lower after analysts at Goldman Sachs lowered their rating and price target on the PC maker.
Ark Innovation (ARKK) – Get ARK Innovation ETF Report edged 0.9% higher, but moved largely in-line with the broader Nasdaq Composite, following a downgrade from Morningstar for star investor Cathie Wood’s flagship exchange traded fund.
