Stock futures rise as traders review March jobs report; Week ahead: inflation data, big bank profits in the spotlight; First Republic Suspends Preferred Dividend Before First Quarter Earnings; Tesla confirms Shanghai ‘megapack’ battery plant plans and Pioneer shares jump after report of Exxon takeover talks.
Five things to know before the market opens on Monday, April 10:
1. — Stock futures rise as traders analyze March jobs report
US stock futures rose on Monday, while the dollar was flat against global peers, as investors get their first chance to react to Friday’s March jobs report and prepare for a key reading. inflation later in the week.
The US economy added 236,000 new jobs last month, a figure that brings the year-to-date total to just over 1 million, with the Bureau of Labor Statistics revising its February estimate higher and the figure for January down. Wage data was also mixed, with average hourly earnings rising 0.3% on the month, matching Street forecasts, but declining to 4.2% on the year compared to the 4.6 pace. % registered in February.
“Reading between the lines of moderate declines in specific sectors such as manufacturing and construction should be an encouraging sign for the Fed that some effects of monetary policy are starting to take hold,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. in Minneapolis. “The data shouldn’t do much to sway the Fed in either direction, but taken alongside recent job openings data and weaker survey-based data, the case is being made for a pause in rate hikes.” “.
Still, the odds for a March hike remain firm, with CME Group’s FedWatch indicating a 64% chance the Fed will raise its target rate to between 5% and 5.25%, although the market is also forecasting a Fed cut in September as economy turns. south during the summer months.
Benchmark 10-year Treasury yields hit 3.363% in thin overnight trade, with many markets in Europe closed for the recent Easter holidays, while 2-year yields they were last quoted at 3.931%.
The US dollar index, which tracks the greenback against a basket of six global currency pairs, was down 0.08% at 102.013 after hitting a two-month low of 101.40 ahead of Friday’s jobs data. .
Heading into the trading day on Wall Street, futures contracts linked to the S&P 500 are priced at a modest opening bell gain of 1.5 points and those linked to the Dow Jones Industrial Average expect a rise of 25 points. . Contacts tied to the technology-focused Nasdaq indicate a 10-point decline.
Overnight in Asia, the MSCI ex-Japan Index rose 0.18% at close of trading, while Japan’s Nikkei 225 gained 0.42% in Tokyo.
2. — Week ahead: inflation data, big bank earnings in focus
Investors are likely to focus on a key inflation release later this week, as well as the unofficial start of Q1 earnings season, for clues as to whether stocks can continue their impressive gains. year-to-date in the face of growing recession concerns. .
JPMorgan, Citigroup (C.) – Get a free reportand Wells Fargo (wfc) – Get a free reportwill form a trio of banks that will report first-quarter earnings before the market opens on Friday, with the Dow UnitedHealth component (UNH) – Get a free reportbeginning that day with your March quarter update at 6:00 am ET.
Collective earnings for the S&P 500 are expected to fall 5.2% from last year to $419.1 billion stock-weighted, with the second-quarter tally expected to show a year-over-year decline of about 4%.
However, Wednesday’s March inflation reading will likely have a bigger impact on the market as investors look for any sign of cooling consumer prices following Friday’s mixed March jobs report and a series of readings from the labor market weaker than expected.
Economists forecast headline inflation to slow to an annualized rate of 5.2%, with the core reading closely watched at 5.5%, compared with readings of 6% and 5.5% respectively over the past year. February month.
Producer price inflation figures are expected Thursday, along with the regular weekly jobless claims release, and the Commerce Department’s March retail sales report is scheduled for Friday at 8:30 a.m. local time. from the east.
3. — First Republic suspends preferred dividend before first quarter earnings
First Republic (FRC) – Get a free reportThe shares fell in premarket trading after the lender and wealth manager said they would suspend dividend payments on its preferred shares.
First Republic, which halted common stock dividends last month, said suspending preferred stock payments was a “prudential supervisory move” ahead of first-quarter earnings on April 24.
First Republic is reportedly still looking to raise capital to shore up its balance sheet, and is also considering selling some of its valuable loan book after a coordinated effort by a group of 11 banks, led by JPMorgan. (JPM) – Get a free reportCEO Jamie Dimon will add $30 billion to the lender’s deposit base last month
First Republic shares were marked 1.6% lower in premarket trading to indicate an opening bell price of $13.81 apiece.
4. — Tesla confirms plans for Shanghai ‘Megapack’ battery plant
tesla (TSLA) – Get a free reportShares rose slightly in premarket trading after the automaker confirmed plans to build a major battery production site in Shanghai.
The move, which deepens Tesla’s investment in China amid rising tensions between Washington and Beijing, will see Tesla expand its Shanghai ‘gigafactory’ later this year as battery production already underway ramps up. in Lathrop, Calif.
The new Shanghai factory will produce around 10,000 units of so-called ‘megapacks’ each year from 2024, the company said, a count level for the firm’s production in California.
Tesla will post its first-quarter earnings on April 19, after the market closes, and analysts are looking for a bottom line of 85 cents a share on revenue of $23.375 billion.
Tesla shares rose 0.14% in premarket trading to indicate an opening bell price of $185.40 apiece.
5. — Pioneer shares jump after Exxon takeover talks report
Pioneering Natural Resources (PXD) – Get a free reportshares rose strongly in premarket trading on reports of possible acquisition interest from Exxon Mobil (XOM) – Get a free report.
The Wall Street Journal reported late Friday that Exxon had held informal talks with the Irving, Texas-based shale producer about a possible acquisition, with the paper citing the group as a “top target” for the use of its proceeds. Recent unexpected events from last year. increase in the price of energy.
Exxon posted record profits of $56 billion last year, with fourth-quarter profit boosted by both a jump in crude oil and a rise in US gas prices. Chief Executive Officer Darren Woods said the The group will “continue to invest in our advantageous projects to generate profitable growth” while remaining focused on cost reduction.
Pioneer, for its part, denied a February report that it was linked to merger talks with rival producer Ranger Resources. (CRR) – Get a free reportsaying at the time that it “is not contemplating a significant business combination or other acquisition transaction.”
Pioneer shares rose 6.6% in premarket trading to indicate an opening bell price of $221.89 each.