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U.S. stocks slump in choppy trading ahead of payrolls - BNN Bloomberg
BNN Bloomberg's mid-morning market update: Mar. 9, 2023
"U.S. stocks reversed gains as investors search for signs of a cooling labour market and tried to interpret a surprise spike in unemployment claims.
✓ S&P 500 and the tech-heavy Nasdaq edged lower in uneven trading as traders positioned ahead of Friday’s jobs data. An index of the dollar slumped while short-term Treasury yields tumbled.
✓ Cryptocurrencies slid with Bitcoin falling to the lowest in nearly a month after the crypto-tied bank Silvergate Capital Corp. collapsed overnight amid growing scrutiny in Washington. Other financial stocks also fell dragged down by SVB Financial Group which sank over 40 per cent the most in 24 years.
Thursday’s data showed weekly jobless claims had risen to 211,000 during the week ending March 4, ahead of expectations for 195,000 and marking the first time claims surpassed 200,000 since early January.
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“This is a tiny glimmer of hope that maybe the U.S. labour market isn’t quite as tight as the other data points are saying,” Fiona Cincotta, senior financial markets analyst at City Index, said by phone. “This is a preshow before the main event.”
The numbers set the stage for Friday’s monthly jobs report, with even just slightly stronger-than-forecast figures expected to cement bets for a bigger hike at the March 21-22 Fed meeting. Economists project a 225,000 increase in February payrolls, about half January’s blockbuster pace, but a figure in that range would confirm the U.S. economy continues to add jobs at a strong rate.
A softer-than expected number could soften wagers on a half-point move in March, and tilt expectations back to a quarter-point hike.
“The market had to do a pretty quick job of repricing higher rate expectations from the Fed after a couple of days of Chair Powell’s testimony on Capitol Hill,” said Art Hogan, chief ma I'mrket strategist at B. Riley Wealth. “We now become data-dependent until the Fed meets.”
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Two-year yields’ premium over their 10-year equivalent narrowed after the data to around 102 basis points, having surpassed 110 basis points earlier this week.
Key events this week:
- Bank of Japan policy rate decision, Friday
- U.S. nonfarm payrolls, unemployment rate, monthly budget statement, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.2 per cent as of 12:05 p.m. New York time
- The Nasdaq 100 rose 0.2 per cent
- The Dow Jones Industrial Average fell 0.2 per cent
- The Stoxx Europe 600 fell 0.2 per cent
- The MSCI World index fell 0.1 per cent
Currencies
- The Bloomberg Dollar Spot Index fell 0.2 per cent
- The euro rose 0.3 per cent to US$1.0573
- The British pound rose 0.6 per cent to US$1.1917
- The Japanese yen rose 0.7 per cent to 136.43 per dollar
Cryptocurrencies
- Bitcoin fell 2.6 per cent to US$21,432.63
- Ether fell 1.8 per cent to US$1,524.95
Bonds
- The yield on 10-year Treasuries declined two basis points to 3.97 per cent
- Germany’s 10-year yield was little changed at 2.64 per cent
- Britain’s 10-year yield advanced three basis points to 3.80 per cent
Commodities
- West Texas Intermediate crude rose 0.3 per cent to US$76.90 a barrel
- Gold futures rose 0.7 per cent to US$1,830.60 an ounce
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