Scott Olson
Stock index futures were slightly higher on Thursday and the market may be in for a holding session with the jobs report on the horizon.
Nasdaq 100 Futures (NDX:IND) +0.4%S&P futures (SPX) +0.2% and Dow futures (INDU) +0.1% they were taller.
Growth is in the foreground foot again and Nvidia (NVDA) is very close to adding $1 trillion in market capitalization only this year.
Fed Chairman Jay Powell returns to Capitol Hill this morning, appearing before the Senate Banking Committee. On Wednesday, traders appeared relieved that his stance had not become more aggressive.
“Yesterday’s statements were consistent with three or four rate cuts this year, but there was a surprise suggestion that a proposed tightening of banking regulation could be rethought,” UBS’s Paul Donovan said.
Rates have been changed slightly. The yield on the 10-year Treasury bond (US10Y) remained unchanged at 4.10%. The 2-year yield (US2Y) fell 1 basis point to 4.56%.
ING said yesterday’s Treasury bond market saw more volatility stemming from New York Community Bancorp’s (NYCB) capital raise than Powell’s.
“While broader risk sentiment still appears robust, the reaction in Treasuries highlights increased sensitivity to any signs of stress – or downside data surprises as seen in recent days,” ING added.
This morning provides more labor market data ahead of Friday’s February payrolls report.
“If (payrolls are) weak, I will be more inclined to view the strong January data as a curveball,” SocGen’s Kit Juckes said. “If they are strong, I will expect forecasters to rethink the Fed’s path once again. They will probably be boring!”
The JOLTS layoff rate fell to 2.1% on Wednesday, the lowest level since August 2020.
“If sustained, the latest decline in the rate of exits indicates that year-on-year ECI growth will fall to just 3% by the middle of this year – below the 2019 pace – from 4.3% in last quarter of last year,” said Ian Shepherdson of Pantheon Macro.
Challenger’s February layoff report comes first, followed by weekly initial claims data. Economists expect claims to reach 217,000.
A “number of other indicators, official and unofficial, point to an increase in layoffs, and we expect a marked upward trend in claims in the spring,” Shepherdson said.