Here are the most important news, trends and analysis that investors need to start their trading day:
Futures rise ahead of jobs report after worst quarter in 2 yearsRecession signal: Key Treasury spread flips for first time since 2019March hiring expected to be robust but down from the prior monthRussian troops turn Chornobyl nuclear site back over to UkraineGameStop soars as the video game retailer announces stock-split plan
1. Futures rise ahead of jobs report after worst quarter in 2 years
U.S. stock futures started the second quarter higher Friday ahead of the government’s March employment report. Wall Street on Thursday ended its worst quarter since the first three months of 2020, which included the Covid pandemic lows in late March of that year. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq all dropped about 1.5% on Thursday. For Q1, the Dow and S&P 500 closed down 4.57% and 4.95%, respectively. The Nasdaq lost 9.1%. The start of a rate-hiking cycle from the Fed, high inflation and Russia’s invasion of Ukraine have all contributed to the struggles for equities so far this year.
2. Recession signal: Key Treasury spread flips for first time since 2019
Treasury spreads could be influenced by the jobs reports Friday, one day after the 2-year yield briefly rose above the 10-year yield for the first time since 2019, an inversion that often happens before economic recessions. Some data providers showed the 2-year-10-year spread inverted for a few seconds on Tuesday, but CNBC data did not confirm it at the time. A negative number on the chart means the two yields are not inverted at this time.
In another key yield spread, which inverted Monday for the first time since 2006, the 5-year and the 30-year flipped again Friday. The short-duration yields going above the longer-dated ones signal the market concerns that the Fed might raise interest rates too quickly. A yield spread on a much shorter time horizon — the 3-month Treasury and the 2-year — has been decidedly positive.
3. March hiring expected to be robust but down from the prior month
A strong jobs report Friday could give the Fed more confidence to keep its aggressive rate-boosting plan in place this year aimed at fighting inflation without slowing the economy too much. Economists expect 490,000 jobs were added in March. That would still be robust, but it would be much lower than the 678,000 nonfarm payrolls created in February. The nation’s unemployment rate is expected to drop slightly to 3.7% in March from 3.8% in February.
4. Russian troops turn Chornobyl nuclear site back over to Ukraine
In the latest developments in Russia’s war against Ukraine:
Russian troops left the heavily contaminated Chornobyl nuclear site early Friday after returning control to the Ukrainians.In what would be the first attack of its kind, if confirmed, the governor of Russia’s Belgorod region accused Ukraine of flying helicopter gunships across the border Friday morning and striking an oil depot.Ukraine has also continued to make successful but limited counterattacks within its borders. Western officials said there were growing indications Russia was using its talk of de-escalation in Ukraine as cover to regroup. Ukrainian and Russian negotiators planned to resume talks via video Friday.
5. GameStop soars as the video game retailer announces stock-split plan
Shares of GameStop jumped 15% in Friday’s premarket, the morning after the video game retailer announced plans for a stock split. GameStop said it will seek approval at its next shareholder meeting for an increase in the number of Class A common stock from 300 million to 1 billion shares to partly conduct a split in the form of a stock dividend.
GameStop was on a tear in March, up 35% as of Thursday’s close, as enthusiastic retail investors stood by their meme favorite. The stock got a boost earlier last month when Chairman Ryan Cohen, who’s effecting a transformation into a digital-first company, bought an additional 100,000 shares, bringing the activist investor’s ownership to 11.9%.