U.S. stocks edged cautiously higher Monday amid the bond market’s latest warning on recession and accelerating bets on Fed rate hikes.
U.S. equity futures edged higher Monday, while the Treasury yield curve extended its inversion, as stocks enter something of a lull this week with jobs data in the rear view mirror and first quarter earnings season set to begin later this months.
Russia’s invasion of Ukraine continues to hold sway over global markets, however, with reports of a move towards fresh sanctions on Moscow following the discovery of mass graves, civilian executions and what French President Emmanuel Macron called “clear clues” of war crimes by Russia troops.
The prospect of new sanctions kept markets muted in Europe, where a benchmark reading of consumer sentiment fell to the lowest levels since August of 2020 amid the region’s record-high inflation and Covid overhang.
In the U.S., the spread between 2-year and 10-year Treasury note yields, which inverted for the first time since 2019 last week, extended to around 6 basis points in overnight trading as the market’s traditional recession warning continues to suggest near-term weakness in the world’s biggest economy.
Stocks Edge Higher, Week Ahead, Tesla, Starbucks And Amazon – Five Things You Must Know
That said, last week’s jobs report was more likely to stoke inflationary concerns as opposed to growth prospects, with 431,000 new positions added, the headline unemployment rate falling to 3.6% and wage growth pegged at 5.4%.
Looking into this week, minutes of the Federal Reserve’s March policy meeting will highlight a muted slate of data and earnings releases as markets ride the lull between payrolls and the start of the first quarter reporting season.
With the CME Group’s FedWatch now pricing in 50 basis point rate hikes for the Fed’s next three meetings in May, June and July, even amid signs of a slowing economy, will weigh heavily on sentiment this week as Fed President’s John Williams, Neel Kashkari, Lael Brainard, Jim Bullard and Raphael Bostic are all slated to speak between Tuesday and Thursday, with Fed minutes set for Wednesday at 2:00 pm Eastern time.
Constellation Brands (STZ) – Get Constellation Brands, Inc. Class A Report and ConAgra Brands (CAG) – Get Conagra Brands, Inc. Report provide the week’s sparse earnings updates ahead of the first quarter deluge expected to begin on April 12, with analysts expecting the growth rate for collective S&P 500 profits to slow from around 32% over the final three months of the year to around 6.4% for the first quarter.
Oil prices were modestly higher, pushed by ongoing supply concerns linked to the conflict in Ukraine as well as the temporary suspension of talks between the U.S. and Iran aimed at resolving a dispute over its nuclear development program that could lead to its return to global oil markets.
WTI crude futures for May delivery were marked 20 cents higher at $99.47 per barrel while Brent contracts for June, the global pricing benchmark, added 6 cents to trade at $104.33 per barrel.
On Wall Street, futures contracts tied to the Dow Jones Industrial Average indicating a 15 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 7 point moved to the upside. Futures linked to the tech-focused Nasdaq are looking at a 60 point opening bell advance.
Twitter (TWTR) – Get Twitter, Inc. Report shares soared 26% higher Monday after billionaire Tesla (TSLA) – Get Tesla Inc Report CEO Elon Musk unveiled a passive stake in the group following his criticism of the micro-blogging website’s content rules.
Shares in his clean-energy carmaker, meanwhile, edged 0.8% higher after record first quarter deliveries over the weekend amid what Musk called an ‘exceptionally difficult’ start to the year.
Starbucks (SBUX) – Get Starbucks Corporation Report shares slumped.2.2% lower after CEO Howard Schultz, in his first move as interim boss of the world’s biggest coffee chain, suspended the group’s stock buyback program.
JPMorgan (JPM) – Get JPMorgan Chase & Co. Report fell 0.7% after CEO Jamie Dimon cautioned investors that its exposure to Russia could clip $1 billion from the bank’s bottom line.
Amazon (AMZN) – Get Amazon.com, Inc. Report shares were also active after workers at the online retailer’s Staten Island warehouse voted to unionize and demanded wage and working conditions talks begin before the end of next month.
