Coffee With Greta: Spirit Considers JetBlue’s Offer
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +110 (+0.3%) SPX Futures: +9 (+0.2%) NASDAQ Futures: +13 (+0.1%) Good morning friends! Futures are up as the market looks to shake off the Fed’s aggressive tightening plans. Let’s get right to it! Spirit Considers JetBlue’s Takeover Offer Spirit Airlines (SAVE) shares are up 1.4% in premarket trade after the discount airline said it will begin talks with JetBlue (JBLU) about a takeover. JetBlue offered Spirit a $3.6 billion cash buyout earlier this week. Spirit said the JetBlue deal could likely lead to a “superior proposal” to the planned merger with Frontier (ULCC). JetBlue’s CEO said, “We look forward to engaging with the Spirit Board to finalize our combination, to create a national low-fare challenger to the four large dominant U.S. carriers that will result in lower fares and better service for customers”. 10-Year Treasury Yield Hits Fresh 3-Year High The 10-year Treasury yield popped over night, rising to a fresh 3-year high at 2.69%. That yield ended last week at just 2.38% and started 2022 at 1.63%. The recent rally in the 10-year yield has been prompted by the Fed’s aggressive plans to tighten monetary policy. The 2-year yield is sitting at 2.52%, meaning the spread between the 10-year and 2-year is positive. But the 30-year and 5-year yield curve remains inverted. The 30-year yield is 2.72% while the 5-year yield is 2.76%. Oil On Track for Losing Week Oil prices are up this morning but headed for a losing week. West Texas Intermediate crude futures are 0.9% higher at $97 per barrel while Brent crude futures are up 0.5% to $101 per barrel. The U.S. Senate voted unanimously Thursday to ban all Russian oil and gas imports and revoke Russia’s most favored nation trade status with the U.S. Both measures were sent back to the House for final approval before being sent to the President’s desk. This move brings Congress in-line with an executive order signed by President Biden in early March. Passing the oil ban through Congress ensures the executive order can not be undone by a future president. Tesla Opens GigaTexas Tesla (TSLA) shares are flat ahead of the open after the electric automaker opened its new gigafactory in Austin, Texas. GigaTexas opened its doors with a Cyber Rodeo celebration Thursday evening. The Austin factory is designed to produce 500,000 Tesla vehicles and is expected to be expanded in the future. Analysts expect production of 100,000 vehicles at the location this year. This is the second major factory Tesla has opened this year after opening GigaBerlin in late March. GigaTexas will also serve as Tesla’s new headquarters, officially moving away from the Gigafactory in Fremont, California. The new location is expected to create 10,000 new low-skilled jobs for the Austin economy. The automaker also partnered with local community colleges to offer a 14-week training program for a manufacturing career at Tesla. Consumer Credit Levels Soar The Federal Reserve reported consumer credit in the U.S. surged in February. Total credit rose at a seasonally adjusted annual rate of 11.3% to $41.8 billion. That was a $32.9 billion increase from January and sharply higher than economists’ expectations for a $15 billion increase. Revolving credit, which includes things like credit cards, surged 20.7%. Non-revolving credit, which includes fixed-rate loans like car loans, jumped 8.4%. In Case You Missed It Weekly jobless claims fell to a nearly 54-year low last week. The Labor Department reported 166,000 Americans filed initial claims. That was down 5,000 from the previous week and better than 200,000 expected. It’s the lowest level since November 1968. HP Inc (HPQ) shares soared to a record high Thursday after Warren Buffett’s Berkshire Hathaway (BRK.A) revealed it took a massive stake in the company. HPQ shares closed 14.8% at $40.07. SEC filings show Berkshire purchased 121 million HPQ shares earlier this week, bringing its stake to 11.4%. That makes Berkshire HP’s largest shareholder.
Continue Reading -->Coffee With Greta: Jobless Claims Fall to 54-Year Low
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -53 (-0.2%) SPX Futures: -1 (-0.02%) NASDAQ Futures: +10 (+0.1%) Good morning friends! Futures are flat following a two-day sell-off. Let’s get right to it! Weekly Jobless Claims Hit 54-Year Low Weekly jobless claims fell to a fresh 54-year low last week. The Labor Department reported 166,000 Americans filed initial claims for unemployment benefits. That was down 5,000 from the week before and sharply beat expectations for claims to rise to 200,000. It’s the lowest level of weekly jobless claims since 1968. Continuing claims rose by 17,000 to 1.523 million vs 1.311 million expected in the week ending March 25. The previous week of continuing claims was revised higher to 1.506 million from 1.302 million. Swift Fed Balance Sheet Runoff Traders finally got answers on the Fed’s plans to reduce its balance sheet. The March meeting minutes show officials agreed to a three-month phase-in of that runoff, topping out at $95 billion per month. There was no decision made on when that process will begin but several Fed officials have hinted this week to it starting at the May meeting. The runoff includes $60 billion worth of Treasury securities and $35 billion worth of mortgage-backed securities per month. The Fed will allow those securities to mature without purchasing new ones but officials did not agree to sell off securities in more aggressive action. The bank’s last balance sheet runoff between 2017-2019 moved at a pace of $50 billion per month. The minutes also showed more FOMC members are in favor of larger rate hikes. The report said, “Many participants noted that— with inflation well above the Committee’s objective, inflationary risks to the upside, and the federal funds rate well below participants’ estimates of its longer-run level — they would have preferred a 50 basis point increase in the target range for the federal funds rate at this meeting.” That prompted traders to raise their expectations for the May meeting. CME Group’s FedWatch Tool now shows 81% of traders expect a 0.5% rate hike next month. Oil Rebounds Oil prices are rebounding today despite the announcement of a major global reserve release. West Texas Intermediate crude futures are up 1.9% to over $98 per barrel with Brent crude futures rising 1.6% to over $102 per barrel. The increase comes despite the International Energy Agency announcing member countries will release 60 million barrels from reserves. That’s on top of the 180 million barrel release announced by the U.S. last week. But supply still remains tight with those releases, the U.S. alone consumes about 20 million barrels of oil per day. Nuclear deal talks between Iran and the U.S. remain stalled, delaying the potential for Iran to help alleviate some of the supply issues. HP Soars on Warren Buffett Investment HP Inc (HPQ) shares are jumping 11.7% in premarket trade Warren Buffett’s Berkshire Hathaway (BRK.A) unveiled a major stake in the company. An SEC filing shows Berkshire purchased nearly 121 million HPQ shares. That amounts to a stake of 11.4%. Constellation Brands Tops Q4 Expectations Constellation Brands (STZ) shares are up 0.9% ahead of the open after beating Q4 expectations. The maker of Corona Beer reported adjusted earnings of $2.37 per share on $2.1 billion in revenue. That beat analysts’ expectations for adjusted EPS of $2.09 on $2.02 billion in revenue. Constellation Brands forecasted full-year 2022 adjusted earnings between $11.20 and $11.50 per share. Wall Street was looking for guidance at $11.27 per share. Levi Strauss Rallies on Strong Q1 Earnings Levi Strauss (LEVI) shares are 1.7% higher in premarket trade after beating Q1 expectations. The denim retailer reported earnings of $0.46 per share on $1.59 billion in revenue. That topped analysts’ expectations for EPS of $0.42 on $1.55 billion in revenue. Revenue rose 22% year-over-year but Levi said it lost about $60 million in sales due to supply chain issues. Levi reaffirmed its fiscal 2022 outlook, forecasting revenue growth between 11% and 13% annually. Costco Sales Surge in March Costco (COST) shares are up 1.1% ahead of the open after reporting a strong month of sales in March. The retailer reported $21.61 billion worth of sales in March, up 18.7% compared to March 2021. Same-store sales across the U.S. surged 19.1% annually. The March retail month included an extra shopping day, which boosted comparable-store sales by 1.5% to 2%. In Case You Missed It Spirit Airlines (SAVE) shares fell 2.4% Wednesday after the discount airline said its board is considering a buyout offer from JetBlue (JBLU). JetBlue offered Spirit a $3.6 billion cash takeover deal late Monday. Spirit said the board will “pursue the course of action it determines to be in the best interests of Spirit and its stockholders.” Frontier (ULCC) shares plunged 11% as the offer threatens to kill its planned merger with Spirit. The Biden Administration extended the moratorium on federal student loans through August 31. This is the sixth time the program has been extended after it was implemented under the Trump Administration due to Covid. Federal student loan borrowers will have no payment due and no new interest will accrue until September 1.
Continue Reading -->Coffee With Greta: Fed Officials Spook Traders
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -226 (-0.7%) SPX Futures: -41 (-0.9%) NASDAQ Futures: -225 (-1.5%) Good morning friends! Futures are lower as traders have their focus on the Fed as the bank is set to release the minutes of its March meeting this afternoon. Let’s get right to it! Fed Officials Spook Traders The market is gearing up for the release of the Fed’s March meeting minutes at 2:00 p.m. ET. This comes after Fed Governor Lael Brainard and San Francisco Fed President Mary Daly made headlines with their hawkish comments on Tuesday. Speaking at the Minneapolis Fed, Brainard said, “inflation is much too high and is subject to upside risks”. She said she expects the balance sheet reduction to be “rapid” and begin as early as the May meeting. Daly reiterated that inflation is far too high, saying “inflation is as harmful as not having a job” in a speech Tuesday afternoon. Those comments were specifically spooky for the market as both Brainard and Daly are typically dovish on monetary policy. The market is looking ahead to this afternoon’s minutes to get more clarity on the Fed’s plans for the immediate future. CME Groups FedWatch Tool shows 76.6% of traders expect a 0.5% rate hike at the May meeting. 10-Year Treasury Yield Spikes The yield on the 10-year Treasury note spiked to the highest level since March 2019 following Brainard’s comments. That yield hit a high of 2.67% this morning after topping out at 2.562% on Tuesday. That put the 2-year/10-year Treasury yield curve back in positive territory after being inverted since last Thursday. The 2-year Treasury yield is at 2.55%. But the curve remains inverted between the 5-year and 30-year yields. The 5-year yield is 2.76% while the 30-year yield is 2.66%. Mortgage Rates Spike, Demand Tumbles The spike in the 10-year yield also caused a spike in mortgage rates. Mortgage News Daily shows the average 30-year contract mortgage rate standing at 5.02%. It’s the first time rates have topped 5% since 2011. And those surging rates are pushing more buyers out of the market. The Mortgage Bankers Association says total mortgage application volume fell 6% last week and was down 41% year-over-year. Refinance applications plunged 10% weekly and 62% annually. New purchase applications were down 3% weekly and 9% lower year-over-year. The average 30-year rate during that time rose to 4.90% from 4.80%, increasing for the fourth straight week. Oil Rises Ahead of New Russia Sanctions Oil prices are rising as the threat of new Russian sanctions outweighs demand concerns. West Texas Intermediate crude futures are up 1.2% to over $103 per barrel while Brent crude futures are up 0.9% to over $107 per barrel. NBC News reported the U.S. and its allies are set to impose new sanctions targeting Russian financial institutions, Kremlin officials, and their family members. The sanctions package is in partnership with the EU and G7 member nations and will also ban new investment in Russia. The EU sanctions would ban Russian coal imports and block Russian ships from entering EU ports. The actions come in response to new allegations of Moscow committing war crimes against civilians in northern Ukraine. Spirit to Consider JetBlue Buyout Offer Spirit Airlines (SAVE) shares are down 2.8% ahead of the open following a $3.6 billion buyout offer from JetBlue Airways (JBLU). Spirit said its board will consider the takeover offer. SAVE shares originally soared after the New York Times report ahead of the close on Tuesday. Trading was halted after shares spiked more than 22%. JetBlue offered Spirit $33 per share or $3.6 billion total in cash. This offer is a 40% premium to Spirit’s planned cash and share merger with Frontier Group (ULCC). Spirit said the board will “pursue the course of action it determines to be in the best interests of Spirit and its stockholders.” JBLU shares are down 4.6% in premarket trade. Tilray Jumps on Surprise Profit Tilray (TLRY) shares are up 8% ahead of the open after reporting an unexpected Q3 profit. The company reported earnings of $0.09 per share on $151.9 million in revenue. That profit beat analysts’ expectations for a loss of $0.08 per share but revenue was shy of the $156.2 million estimate. Tilray reaffirmed its revenue guidance and said it is on track to achieve $4 billion in revenue by the end of fiscal 2024. In Case You Missed It Carnival (CCL) shares rallied 2.3% Tuesday after reporting its busiest week of bookings ever. Carnival said the week between March 28 and April 3 set a new record for weekly bookings. The company saw a double-digit increase in bookings from the previous record week. Twitter (TWTR) shares rose 2% Tuesday after announcing Tesla (TSLA) CEO Elon Musk will join the company’s board of directors. Musk will serve as a Class II director with his term expiring in 2024. In a tweet, he said he is looking forward to making “significant improvements” to Twitter. Musk bought a 9.2% stake in Twitter on March 14.
Continue Reading -->Scott Redler Discusses the Elon Musk-Twitter Explosion
Was it IMPOSSIBLE to catch Twitter’s (TWTR) share price explosion, driven by Elon Musk taking a 9.2% stake in the company and then joining the board? No! Scott Redler just joined Liz Claman on Fox Business, revealing why he bought Twitter call options last week — BEFORE we heard the Elon Musk news: Watch the latest video at foxbusiness.com *past performance does not guarantee future performance Scott explains:Why Twitter has been considered an undervalued assetThe problem with Jack DorseyWhat unusual options activity told Scott about TwitterWhy he stayed with the stock after Monday’s popAnd interestingly enough… in his 2022 Market Outlook Report, Scott predicted Twitter would reach the $53 to $55 area this year, as you can see here:Twitter just hit $54.94 in premarket trade: Now let’s look at the chart of the Twitter April 29 $43 calls Scott picked up for about $1.40 last week: They went from $1.40 to $12.25! Scott trimmed and trailed on the way up as part of his trade management style, and as of this writing, is still long some Twitter and April 29 $43 calls. The lesson? Pay attention to unusual options activity. It doesn’t always pay off… but sometimes, the results can be explosive… especially when Elon Musk is in the mix.P.S. Want a FREE month to Scott’s Services So You Can Get His Next Call on Stocks Like Twitter and Tesla? Our “Buy One Get One” Sale Is ON! So hit that big red button to get started today: Click Here Now Positions Disclosure as of 4/5/2022 at 3:59 p.m. ET
Continue Reading -->Coffee With Greta: Elon Musk Joins Twitter Board
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -69 (-0.2%) SPX Futures: -9 (-0.2%) NASDAQ Futures: -44 (-0.3%) Good morning friends! Futures are slipping as the market gives up Monday’s tech rally. Let’s get right to it! Musk Joins Twitter’s Board of Directors Twitter (TWTR) shares are up 5.4% in premarket trade after the company announced Elon Musk will join the board of directors. In a tweet, Twitter CEO Parag Agrawal said he was “excited to share” they are appointing Musk to the board. I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board. — Parag Agrawal (@paraga) April 5, 2022 An SEC filing shows Musk will serve as a Class II director and his term will expire in 2024. During that term and 90 days after, his stake cannot surpass 14.9%. TWTR shares surged 27% on Monday, marking the company’s best day since its IPO in November 2013. That rally came after a new SEC filing revealed Tesla (TSLA) CEO Elon Musk had purchased a 9.2% stake in the social media company on March 14. His purchase of 73,486,938 TWTR shares makes him the largest shareholder in the company. Many analysts expect him to use his stake to push for change at Twitter after being an outspoken critic of the social media platform in the past. In a tweet Monday night, Musk asked his followers if they want an edit button on Twitter. Do you want an edit button? — Elon Musk (@elonmusk) April 5, 2022 Cruisers Are Back Carnival Corp (CCL) shares are jumping 5.1% ahead of the open after reporting its busiest week of bookings ever. Carnival said the week between March 28 and April 3 set a new record for weekly bookings. The company saw a double-digit increase in bookings from its previous record week. 22 of Carnival’s 23 ships are back in operations at U.S. ports. The final ship will return on May 2 and a new ship will be introduced in November. Foreign Trade Deficit Dips The U.S. trade deficit dipped in February. The Commerce Department reported the deficit fell 0.1% to $89.2 billion. The decline came as exports jumped 1.8$ to $228.6 billion and imports rose 1.3% to $317.8 billion. That was the fourth month in a row imports topped $300 billion. The U.S. trade deficit has been volatile as the American economy reopened faster than our global trading partners. Oil Climbs Ahead of New Russia Sanctions Oil prices are higher today as the U.S. and Europe plan a new round of sanctions against Moscow. West Texas Intermediate crude futures are up 1.1% to over $104 per barrel while Brent crude futures are up 1% to over $108 per barrel. Talks remain stalled between the U.S. and Iran to revive the Iran nuclear deal. That deal is expected to allow Iran to help alleviate supply issues in the global oil market. Treasury Yield Curve Remains Inverted Two parts of the Treasury yield curve remain inverted as traders look ahead to the Fed minutes this week. The yield on the 2-year Treasury note is 2.48% while the yield on the 10-year note is 2.47%. The 5-year Treasury yield is 2.62% while the 30-year bond yield is 2.53%. Several Fed officials are set to speak about the economy today. Fed Governor Lael Brainard speaks at 11:00 a.m. ET, San Francisco Fed President Mary Daly speaks at 12:30 p.m. ET, and New York Fed President John Williams speaks at 2:00 p.m. ET. Former Fed Governor Lawrence Lindsey warned inflation will cause a recession in Q3. Lindsey told CNBC on Monday, “Inflation is eating into consumer spending power, they’re going to have to cut back”. He said the Fed is “nowhere close” to getting inflation under control and he sees those pressures rising further this year. In Case You Missed It Tesla (TSLA) shares rallied 5.6% on Monday after the electric automaker reported a record number of deliveries in Q1. Tesla delivered 310,048 vehicles and produced 305,407 vehicles last quarter. Model 3 and Model Y vehicles made up 295,324 of those deliveries.
Continue Reading -->Signs of a Possible Pullback?
Fundamentally, there is no reason for the market to be rallying… but the bullishness is undeniable anyways. This week, Sami is watching for signs of a sell setup, which would be the catalyst to change his sentiment. What are the signs he’s looking for, and how likely is it for the market to pull back? In this video, Sami explains: – Why he doesn’t think the best ideas will be in the US equities market – Which crypto name he thinks will fare the best if the market remains bullish – The Chinese stocks he’s looking at this week – How high the target for CPSH is – What he likes about EAR even though it’s thin
Continue Reading -->Options In Play – Earnings On The Radar Week Of 4/8/22
It’s the quiet before the earnings season storm. This coming week will only have a handful of names reporting, but things pick up quickly after.
Continue Reading -->Scott Redler’s Dog Bytes: Thank You, Elon!
SPX futures are +4. Friday gave us the 4507 pivot to trade against after hitting a high of 4637. We’ve had a nice active sequence since SPX reclaimed the 8/21 day around 4335 on 3/15. We’ll see if we can rebuild some new patterns to stay constructive as we head towards earnings season.TWTR is up 22% on Elon Musk taking a stake in the company. Some members of the community flagged unusual options activity, so I got in calls. Thanks Elon! You made my day! MSFT has had lots of tradable patterns as it cleared $305.50 to see $315+. It hit a low of $305.54 before bouncing. It looks above $310 this morning. See if it holds above that. FB hit a high of $231 and pulled back a bit. It needs to hold the $222 area to stay constructive. If it can get and stay above $227.50, perhaps it opens the door for more upside. GOOGL had a big move to $2871. Many got stopped out when it broke $2840. On Friday, some bought with a Red Dog Reversal buy through $2781. Now see if it can get and stay above $2809.Positions Disclosure as of 4/4/2022 at 9:02 a.m. ET
Continue Reading -->Coffee With Greta: Musk Takes Stake in Twitter
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +23 (+0.1%) SPX Futures: +9 (+0.2%) NASDAQ Futures: +52 (+0.4%) Good morning friends! Futures are slightly higher as the market gears up for a new week of trade focused on the Fed. Let’s get right to it! Musk Takes Stake in Twitter Twitter (TWTR) shares are surging 19.5% ahead of the open after a new SEC filing revealed Tesla (TSLA) CEO Elon Musk purchased a big stake in the company. The filing shows Musk owns 73,486,938 TWTR shares, which represents a 9.2% stake in the company. At Friday’s closing price, that stake is worth $2.89 billion. This makes Musk the largest outside shareholder in the stock. The purchase comes after he criticized Twitter in a series of tweets a couple weeks ago. He ran a poll questioning if the site adheres to free speech principles. Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle? — Elon Musk (@elonmusk) March 25, 2022 Musk also said he was giving “serious thought” to building a new social media platform. Tesla Unveils Q1 Deliveries Tesla (TSLA) shares are up 0.8% in premarket trade after the electric automaker unveiled Q1 delivery and production numbers. The company said it delivered 310,048 vehicles in the first 3 months of the year while production totaled 305,407. Model 3 and Model Y vehicles made up 295,324 of those deliveries. Tesla said it struggled with “ongoing supply chain challenges and factory shutdowns” during the quarter. The company was unable to resume production at its factory in Shanghai as planned today. Reuters reported an internal notice to employees told workers and suppliers that work would not resume today. Tesla did not tell employees when they expect to reopen. The factory has been closed since March 28 when China put Shanghai under lockdown due to a new Covid outbreak. Tesla manufacturers 6,000 Model 3 and 10,000 Model Y vehicles per week at the Shanghai factory. Starbucks Suspends Share Buybacks Starbucks (SBUX) shares are falling 2.9% ahead of the open after the company announced it’s suspending stock buybacks. Today is chairman Howard Schultz’s first day as interim CEO as the coffee chain looks for a permanent replacement for Kevin Johnson. In a statement, Schultz said, “This decision will allow us to invest more profit into our people and our stores — the only way to create long-term value for all stakeholders”. In October, Starbucks committed to spending $20 billion over the next three years on buybacks and dividends. Treasury Yield Curve Inversion The market’s recession alarm bells are going off as a key part of the Treasury yield curve remains inverted. The yield on the 2-year Treasury note is 2.42% while the 10-year yield is 2.39%. That spread has been negative since late Thursday. The inversion comes as traders turn their focus to the Fed minutes which are set to be released Wednesday. The market is hoping that readout of the March meeting will provide more clarity on the bank’s plans to tackle inflation. The spread between the 5-year Treasury note and 30-year Treasury bond is also negative. The 5-year yield is 2.53% while the 30-year yield is 2.46%. The inversion is not a guarantee of an impending recession but the 2-year/10-year curve has inverted before every major recession since 1955. Oil Prices Rebound Oil prices are rising today as the U.S. reserve release failed to alleviate supply concerns. West Texas Intermediate crude futures are up 2.3% to over $101 per barrel while Brent crude futures are up 1.9% to over $106 per barrel. The rally comes as several European leaders call for more sanctions against Russia. Talks have also been paused between the U.S. and Iran to revive the Iran nuclear deal. Meantime the UN brokered a two-month truce in Yemen between a Saudi-led coalition and the Houthi rebel group after recent Houthi attacks on Saudi oil facilities. Factory Orders Preview The Commerce Department reports factory orders for February at 10:00 a.m. ET. That data is expected to show a decline of 0.6% after orders jumped 1.4% in January. U.S. manufacturers have struggled with worsening supply chain issues and rising costs. In Case You Missed It The March jobs report showed the U.S. economy added 431,000 jobs last month vs expectations for 490,000. The unemployment rate fell to 3.6% from 3.8% as the labor market nears full employment. But the labor force participation rate rose just 0.1% to 62.4%, down a full point from pre-pandemic levels. Average hourly wages rose 0.4% monthly and 5.6% annually, those gains are continuing to lag behind inflation.
Continue Reading -->Coffee With Greta: Labor Market Nears Full Employment
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +122 (+0.4%) SPX Futures: +14 (+0.3%) NASDAQ Futures: +45 (+0.3%) Good morning friends! Futures are higher as the market kicks off a new quarter with fresh jobs data. Let’s get right to it! Job Growth Falls Short in March The March jobs report shows the labor market is nearing full employment as the pool of available workers shrinks. The Labor Department reported the U.S. economy added 431,000 workers last month. That was a slowdown from the upwardly revised 750,000 in February and slightly lower than expectations for 490,000. The leisure and hospitality sector added the most jobs last month with 112,000. The unemployment rate fell more than expected, dropping to 3.6% from 3.8%. The labor force participation rate rose 0.1% to 62.4%, that metric is still down 1 point from pre-pandemic levels. Average hourly earnings rose 0.4% monthly as expected and 5.6% year-over-year. Treasury Yield Curve Inverts A key part of the Treasury yield curve remains inverted following that jobs data. The yield on the 2-year Treasury is up to 2.436% and the 10-year yield is sitting at 2.422%. Those yields inverted officially in late trading Thursday. This inversion is seen as a warning sign for a recession in the next one to two years. The 2-year/10-year spread has inverted before every recession since 1955. The 5-year and 30-year Treasury yields also inverted this morning. The yield on the 5-year Treasury note hit a high of 2.56% while the yield on the 30-year Treasury bond rose to just 2.53%. GameStop Surges on Stock Split Announcement GameStop (GME) shares are surging 14.7% ahead of the open after the video game retailer announced plans to split the stock. The company announced it will seek shareholder approval to increase the number of outstanding shares to 1 billion from 300 million. That split would be implemented in the form of a stock dividend. GameStop said the split would “provide flexibility for future corporate needs.” Oil Prices Remain Lower Oil prices are lower as more nations are set to discuss reserve releases. West Texas Intermediate crude futures are down 1.5% to just under $99 per barrel with Brent crude futures slipping 1% to under $104 per barrel. The International Energy Agency member nations are set to meet today to discuss the release of more global reserves. This comes after President Biden ordered the release of 1 million barrels of oil per day from the U.S. Strategic Petroleum Reserve for the next 6 months. That’s the largest and longest SPR release in history and is an effort to reduce record-high gas prices in the U.S. But experts say it won’t make much of a difference in oil supply as the U.S. consumes on average 20 million barrels per day. Data from AAA shows the national average at $4.215 per gallon today. In Case You Missed It PCE inflation pressures hit a 40-year high in February. The PCE Price Index surged 6.4% year-over-year, the strongest gain since January 1982. The Fed’s preferred inflation gauge, the Core PCE Index, jumped 5.4% annually. That’s the largest gain since April 1983. On a monthly basis, headline inflation rose 0.6% while incomes rose just 0.5%.
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