After Friday’s robust jobs report, U.S. stock index futures were neutral on Monday.
Growth stocks Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), and Microsoft Corp (MSFT.O) fell in premarket activity, headed by Nasdaq 100 futures.
On Friday, U.S. companies continued a solid pace of hiring in March, lowering the unemployment rate to 3.5% and increasing the prospects of a Fed rate hike next month.
Investors focused on labor market stability, although last month’s 236,000 nonfarm payrolls gained slightly below experts’ estimates.
“We see a gap between markets anticipating substantially looser Fed policy on “softer” data and how the Fed will actually interpret the data,” Citi economists said.
We expect future rises due to persistently high inflation, including a 0.5% MoM increase in core CPI this week.
Citi forecasts three 25 basis point rate rises at the next Fed meetings to reach 5.50-5.75%.
With the data, Treasury rates rose, with the two-year yield rising to 3.993% on Good Friday when U.S. stock markets were closed. The last down was 3.9306%.
This week will focus on U.S. consumer prices, Fed meeting minutes, and key U.S. banks’ first-quarter reports, including JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N), and Wells Fargo & Co. (WFC.N).
Refinitiv IBES expects S&P 500 company earnings to fall 5.2% in the first quarter, down from 1.4% at the start of the year.
At 05:03 a.m. ET, Dow e-minis were up 12 points, or 0.04%, S&P 500 was unchanged, and Nasdaq 100 was down 31.75 points, or 0.24%.
First Republic Bank (FRC.N) shares fell 1.4% after the institution announced it would halt quarterly cash distributions on its preferred stock “as a measure of responsible management.”
As Fed data issued on Friday showed deposits at U.S. commercial banks climbed near the end of March for the first time in almost a month, showing signs of stabilization after recent bank failures frightened depositors, other regional bank shares fell.
Western Alliance Bancorporation (WAL.N) fell 0.8%, and PacWest Bank (PACW.O) 0.6%.
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