Stock futures rebound as investors assess start of new quarter, indicator of bond market recession

Stock futures rose early Thursday as investors priced in another quarter of trading and a troublesome indicator of a bond market recession.

Investors were also awaiting the official jobs report for March, which the Department of Labor will release at 8:30 a.m. ET on Friday.

Dow futures gained 90 points, or 0.3%. S&P 500 futures added 0.2% and Nasdaq 100 futures rose 0.3% to kick off the first trading session of the second quarter.

The Dow Jones Industrial Average slumped Thursday to end the first negative quarter for stocks in two years, with losses accelerating in the final hour of trading. The Dow Jones lost 550.46 points, or 1.56%, to 34,678.35. The S&P 500 slid 1.57% to 4,530.41, and the Nasdaq Composite fell 1.54% to 14,220.52.

All three major averages posted their worst quarter since March 2020. The Dow Jones and S&P 500 fell 4.6% and 4.9% respectively during the period, and the Nasdaq fell more than 9%. Equities, however, staged a comeback at the end of the quarter in March after sharp declines due to rising interest rates and inflation marked the first part of the year.

Stocks have so far shook off a bond market recession signal that was triggered after the closing bell on Thursday. 2-year and 10-year Treasury yields inverted for the first time since 2019. For some investors, this is a signal that the economy is heading for a possible recession, although the inverted yield curve does not predict not exactly when that will happen and history shows it could be over a year or more away.

“I think everyone needs to recognize the fact that we’re obviously going to be entering a slower economic environment,” Shannon Saccocia, chief investment officer at Boston Private Wealth, told CNBC’s “Closing Bell.”

“You have to get earnings growth somewhere, and if it’s not a secular tailwind, like fiscal spending and monetary policy loosening, then you have to look for growth elsewhere. I think we’re going to see a real nuance in the next three months or so as people look for that growth in this tougher economic environment.”

A good jobs report on Friday could give the Fed more confidence to stick to its aggressive plan to hike rates this year to stifle inflation without fear of slowing the economy too much. Economists expect about 490,000 jobs to have been added in March, according to the Dow Jones consensus estimate, after an increase of 678,000 jobs in February. The unemployment rate is expected to fall to 3.7% from 3.8%, according to Dow Jones.

GameStop rose more than 10% in extended trading after the video game retailer and meme stock announced plans to split its shares.

Energy prices fell Thursday after the White House announced it would release an unprecedented amount of oil from the Strategic Petroleum Reserve. Up to 1 million barrels of oil per day will be released over the next six months.

Other key indicators to watch include the ISM manufacturing index and the construction spending report, both of which will be released at 10 a.m. ET on Friday.

Stock futures rebound as investors assess start of new quarter, indicator of bond market recession

Source link Stock futures rebound as investors assess start of new quarter, indicator of bond market recession

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