Stock futures extend gains as banking crisis concerns ease; FDIC seeks higher fees for big banks; H&M shares rise after strong quarterly gains; Electronic Arts laid off 6% of staff as tech job cuts accelerate and Major League Baseball’s opening day brings historic changes to the national pastime.
Five things to know before the market opens on Thursday, March 30:
1. — Stock futures extend gains as banking crisis concerns ease
US stock futures extended recent gains on Thursday, with technology shares consolidating a move into ‘bull market’ territory and volatility dipping to a three-week low as investors look to exit the recent turmoil sparked by concerns in the banking sector.
The S&P 500 closed above its 50-day moving average, a key indicator for market technicians, for the first time since Silicon Valley Bank’s collapse on March 10, as improving corporate prospects and confidence The overall market boosted risky assets overall.
Federal Reserve vice president for supervision Michael Barr spent two days in congressional hearings insisting to lawmakers that SVB Financial’s failure was the result of management errors and not indicative of broader tensions in the banking sector, an opinion which seems to be finding increasing acceptance. in global financial markets.
The MSCI World Index, the broadest measure of global stocks, is on track for a gain of close to 5% in the first quarter, while the Nasdaq 100 closed last night at 12,846.03 points, marking a 20% rebound from its lows. late December and putting the US Tech Benchmark into bull market territory.
The leading gauge of stock market volatility, the CBOE Group’s VIX Index, is also indicating signs of calm, falling another 4.8% in overnight trading to a nearly a month low of 19.02.
Elsewhere, benchmark 2-year bond yields rose again on Thursday and could dampen early stock market gains as traders await Friday’s release of the Fed’s preferred inflation gauge, the Index. of PCE prices.
The US dollar index, which tracks the greenback against a basket of six global currencies, was down 0.23% overnight to 102.398, a move that suggests further market optimism, while yields on US dollar bonds 2 years were set at 4.082%.
On Wall Street, shares of another company are open ahead of weekly jobless claims data and a third estimate of fourth-quarter GDP growth at 8:30 am ET.
Futures contracts linked to the S&P 500 indicate an opening bell gain of 18 points, while those linked to the Dow Jones Industrial Average suggest a move up 150 points. Nasdaq-linked futures indicate a 50-point advance amid the bullish push in Treasury yields.
Overnight in Asia, the MSCI ex-Japan index of the entire region rose 0.56% at close of trading, while Japan’s Nikkei 225 fell 0.13% in Tokyo.
In Europe, the Stoxx 600 was up 1% in early hours in Frankfurt and was trading at a two-week high, while the FTSE 100 was up 0.65% in London.
2. — FDIC Seeks Higher Fees for Big Banks
The Federal Deposit Insurance Corporation is evaluating plans to increase fees paid by the largest banks to shore up its bank bailout fund after the $23 billion hit to cover deposits at Silicon Valley Bank and Signature Bank.
Bloomberg reported Thursday that the FDIC, which set its general fund at $128 billion late last year, is seeking to ease the burden on local and community lenders, who are scrambling to hold onto deposits after record outflows in the wake of Silicon. Valley Bank collapses, while fees paid by bigger lenders like JPMorgan rise (JPM) – Get a free reportfargo wells (wfc) – Get a free reportand Bank of America (bac) – Get a free report.
“We have the discretion to tailor that assessment to the institutions that benefited most directly (the flight of deposits from smaller to larger lenders,” FDIC Chairman Martin Gruenberg told lawmakers on Capitol Hill yesterday. “We’re going to be very sensitive to impact.”
First Republic (FRC) – Get a free reportshares were marked 0.21% lower in premarket trading to indicate an opening bell price of $14.23 apiece, while Western Alliance Bancorporation (WALL) – Get a free reportit was up 2% to $36.79 each. Pac West Bancrop (PACW) – Get a free reportincreased 1.4% to $10.00 each.
3. — H&M shares rise after strong quarterly earnings
Shares of Hennes & Mauritz rose in European trading on Thursday after the world’s second-largest closing retailer posted stronger-than-expected February quarter earnings.
H&M, which has more than 500 stores in the United States, said operating profit rose 58% from last year to just under $70 million, with gross margins improving 1.4% to 47, 2%, even as the group continues to eliminate excess inventory under CEO Helena Helmersson.
Sales for the current month are likely to rise by around 4%, H&M said, as European activity is affected by colder weather and consumers continue to cut spending amid rising inflation.
“The beginning of the year shows that we have taken further steps towards the goal of achieving a 10% operating margin next year,” Helmersson said in a statement.
H&M shares rose 15.1% in Stockholm trading to change hands at SEK 141.42 each.
4. — Electronic Arts to lay off 6% of staff as tech job cuts accelerate
electronic arts (USA) – Get a free reportShares fell in premarket trading after the video game maker said it would cut about 6% of its global workforce.
The maker of the FIFA and NBA 2K soccer game franchises said it would reduce its footprint of office space and real estate, abandon some projects and reduce its overall headcount in a cost-cutting campaign that reflects declining demand in the Games market in general and the current selection. of jobs in the technology sector, which exceeded 63,000 during the first two months of the year, according to data from Challenger Gray.
Electronic Arts said the measures could likely incur charges of between $170 million and $200 million, with about $60 million related to dismissal charges.
Shares of Electronic Arts were marked 0.12% lower in premarket trading to indicate an opening price of $119.05 apiece.
5. — Major League Baseball’s opening day brings historic changes to the national pastime
Major League Baseball will kick off its 2023 regular season Thursday with a full 15-game roster, marking the first time since 1968 that Opening Day included all 30 franchises, and big changes to the way the national pastime is played.
The New York Yankees will kick off at 1:05 p.m. ET with a home matchup against the San Francisco Giants while, at the same time, the Washington Nationals host the Atlanta Braves. .
The defending World Series champion Houston Astros will begin their title defense at home against the Chicago White Sox at 7:08 pm ET.
MLB faces a number of challenges this year, including the bankruptcy of a key regional sports network, Diamond Sports Group, which could affect the broadcast of games from 14 different Major League Baseball teams.
Declining television ratings, coupled with an effort to attract younger viewers to both televised games and the league’s various stadiums, has led to a number of rule changes set to take effect this year. , including clocks that will limit pitchers to 15 seconds per pitch and give teams just 30 seconds between batters.
MLB says the changes, which were used during Spring Training this year, have reduced playing times by around 26 minutes.
“We have tried to address the concerns expressed in a way that is thoughtful, respectful, always, of the history and traditions of the game and the concerns of the players,” MLB Commissioner Rob Manfred said.
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