Chris Hondros
Stock index futures ended Friday and yields jumped after the March jobs report showed job gains close to market forecasts.
S&P Futures (SPX) +0.3%Dow Futures (INDU) +0.2% and Nasdaq Futures (NDX:IND) +0.1% lower finished.
The 10-year Treasury yield (US10Y) rose 8 basis points to 3.37% and the 2-year yield (US2Y) rose 14 basis points to 3.96%.
Non-farm payrolls rose 236k in March vs forecasts of 230k-240k. Unexpectedly, the unemployment rate fell to 3.5% while the labor force participation rate rose to 62.6%.
After a week of weak jobs data, this bond market was clearly trending lower than the consensus jobs reading and short-end yields are now recovering.
Fed fund futures are pricing in a 56% chance of Fed rate hikes in May. They priced in a 54 percent chance of a 25 basis point hike before the numbers were released.
“Few #payroll takeaways 1) Labor markets remain isolated for now +236k headlines above consensus 2) Private sector a little weak and public sector a little strong – not great but likely noise 3) Urates down and participation up as household survey ends long gap in the establishment,” tweeted Janney’s Guy LeBas.
“Wages continue to slow,” tweeted economist Nick Bunker. “Wage growth is now at 3.2% yoy over three months. Production worker at 4.”
Wall Street will close for regular stock trading on Good Friday, along with major stock exchanges in Europe. However, since this is not a US federal holiday, stock index futures will trade as usual on the CME until 9:15 am ET. Trading in the bond market will also be constrained with a recommended close at 12:00pm ET (it would normally be closed if it weren’t for today’s data).
The S&P 500 (SP500) has enjoyed a three-week winning streak this holiday-shortened week.
Comments are closed.