The S&P 500 futures trade 31 points, or 0.7%, above fair value heading into the release of the March Employment Situation report at 8:30 a.m. ET.
The Briefing.com consensus is projecting 474,000 additions to nonfarm payrolls, a 3.7% unemployment rate (versus 3.8% in the prior month), and a 0.4% increase to average hourly earnings – essentially a tight labor market that will factor into the Fed’s decision making.
Investors will also receive the ISM Manufacturing Index for March (Briefing.com consensus 58.3%) and Construction Spending for February (Briefing.com consensus 1.0%) at 10:00 a.m. ET.
Some measures of support ahead of the employment report include first-of-the-month inflows as investors put new money to work after a two-day decline, and news that virtual peace talks between Russia and Ukraine are continuing today.
In the Treasury market, the 2s10s spread went negative again last night but as yields pushed higher not lower. Presently, the 2-yr yield is up 11 basis points to 2.39%, and the 10-yr yield is up eight basis points to 2.41%. The U.S. Dollar Index is up 0.2% to 98.49. WTI crude futures are down 1.0% to $99.25/bbl.
Separately, shares of GameStop ( GME 192.16, +35.58, +15.4%) have risen 15% in pre-market action after the company announced plans to seek approval for a 3.33-for-1 stock split for its Class A shares.
In U.S. Corporate news:
- GameStop (GME 192.16, +35.58): +15.4% after announcing plans to seek approval for a 3.33-for-1 stock split for Class A shares.
- PNC (PNC 185.71, +1.26): +0.7% despite issuing downside Q1 revenue guidance. PNC shares fell 8.0% in the first quarter, so the guidance may have been priced in already.
- BlackBerry (BB 7.13, -0.33): -4.4% despite beating EPS estimates.
- Duck Creek Technologies (DCT 19.40, -2.72): -12.3% after guiding fiscal Q3 revenue below consensus, overshadowing its better than expected fiscal Q2 results.
Reviewing overnight developments:
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Equity indices in the Asia-Pacific region ended the week on a mostly higher note. Japan’s Nikkei: -0.6% (-1.7% for the week) Hong Kong’s Hang Seng: +0.2% (+3.0% for the week) China’s Shanghai Composite: +0.9% (+2.2% for the week) India’s Sensex: +1.2% (+3.3% for the week) South Korea’s Kospi: -0.7% (+0.4% for the week) Australia’s ASX All Ordinaries: -0.1% (+1.3% for the week).
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In economic data:
- China’s March Caixin Manufacturing PMI 48.1 (expected 50.0; last 50.4)
- Japan’s Q1 Tankan Large Manufacturers Index 14 (expected 12; last 17) and Large Non-Manufacturers Index 9 (expected 5; last 10). Q1 Tankan All Big Industry Capex 2.2% (expected 4.0%; last 9.3%). March Manufacturing PMI 54.1 (expected 53.2; last 52.7)
- South Korea’s March trade deficit $140 mln (last surplus of $830 mln). March Imports 27.9% yr/yr (expected 27.8%; last 25.2%) and Exports 18.2% yr/yr (expected 17.5%; last 20.6%). March Nikkei Manufacturing PMI 51.2 (last 53.8)
- Australia’s March Manufacturing PMI 57.7 (expected 57.3; last 57.0) and AIG Manufacturing Index 55.7 (last 53.2). February Home Loans -4.7% m/m (last 1.0%). March Commodity Prices 40.9% yr/yr (last 16.7%)
- Singapore’s Q4 URA Property Index 0.4% qtr/qtr (last 1.1%)
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In news:
- Japan’s Manufacturing PMI remained in expansionary territory for the 14th consecutive month while South Korea’s Manufacturing PMI indicated expansion for the 18th month in a row.
- China’s Caixin Manufacturing PMI fell into contraction for the first time since January.
- A former Japanese currency official warned that the recent rapid depreciation in the yen is a negative since it reflects waning competitiveness.
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Major European indices are tracking a higher finish to the week. STOXX Europe 600: +0.6% (+1.2% week-to-date) Germany’s DAX: +0.4% (+1.2% week-to-date) U.K.'s FTSE 100: +0.2% (+0.7% week-to-date) France’s CAC 40: +0.6% (+2.2% week-to-date) Italy’s FTSE MIB: +0.9% (+2.8% week-to-date) Spain’s IBEX 35: +0.9% (+2.3% week-to-date).
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In economic data:
- Eurozone’s flash March CPI 2.5% m/m (last 0.9%); 7.5% yr/yr (expected 6.6%; last 5.9%). March Core CPI 2.5% m/m (last 0.9%); 3.0% yr/yr (expected 3.1%; last 2.7%). March Manufacturing PMI 56.5 (expected 57.0; last 58.2)
- Germany’s March Manufacturing PMI 56.9 (expected 57.6; last 57.6)
- France’s March Manufacturing PMI 54.7 (expected 54.8; last 54.8). February budget deficit EUR37.60 bln (last deficit of EUR15.90 bln)
- Italy’s March Manufacturing PMI 55.8 (expected 57.0; last 58.3)
- Spain’s March Manufacturing PMI 54.2 (expected 55.5; last 56.9)
- Swiss March CPI 0.6% m/m (expected 0.5%; last 0.7%); 2.4% yr/yr, as expected (last 2.2%). March procure.ch PMI 64.0 (expected 60.5; last 62.6)
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In news:
- Eurozone’s yr/yr CPI rate accelerated to a fresh record of 7.5% in the flash reading for March.
- BASF CEO warned that putting an immediate halt to imports of natural gas from Russia would cause many small and medium-sized companies to go bankrupt.
- Gas continued flowing to Europe today despite the passing of a deadline that requires buyers to pay in rubles.
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U.S. equity futures:
- S&P 500 Futures: +26 @ 4,556
- DJIA Futures: +197 @ 34,875
- Nasdaq 100 Futures: +103 @ 14,942
Overseas:
- Europe: DAX +0.4%, FTSE +0.2%, CAC +0.6%
- Asia: Nikkei -0.6%; Hang Seng +0.2%, Shanghai Composite +0.9%
Commodities:
- Crude Oil -1.66 @ 98.62
- Nat Gas -0.021 @ 5.621
- Gold -23.50 @ 1925.70
- Silver -0.323 @ 24.810
- Copper -0.0520 @ 4.6960