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Investors Examine the Start of a New Quarter and Stock Futures Rise, Indicating a Bond Market Recession

Investors Examine the Start of a New Quarter and Stock Futures Rise

Early Friday, stock futures climbed as investors examined the start of a new trade quarter and a troubling bond market recession indicator.

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

The Dow Jones Industrial Average futures upsurge 87 points or 0.25 per cent. S&P 500 futures and the Nasdaq 100 futures added 0.46% and 0.3% respectively.

The Dow Jones faced a fall on Thursday, bringing the stock market’s first negative quarter in two years to a close, with losses picking up in the final hour of trade. The Dow Jones Industrial Average plunged 550.46 points, or 1.56 percent, to 34,678.35. The S&P 500 index fell 1.57 percent to 4,530.41, while the Nasdaq Composite fell 1.54% to 14,220.52.

Since March 2020, all three major averages have had their lowest quarter. The Dow and S&P 500 fell 4.6 percent and 4.9 percent, respectively, while the Nasdaq fell more than 9%. Stocks did make a late-quarter rebound in March, though, following a year marked by severe falls due to rising interest rates and inflation.

For the time being, stocks have managed to shake off a recession signal issued by the bond market after the closing bell on Thursday. Since 2019, the 2-year and 10-year Treasury rates have reversed for the first time.

For some investors, the inverted yield curve is a sign that the economy is on the verge of a recession; however, it does not forecast when one will occur, and history shows that it could take more than a year or two longer.

Shannon Saccocia, chief investment officer at Boston Private Wealth, told CNBC’s “Closing Bell” that “everyone needs to face the fact that we will be heading into a slower economic climate.”

“You have to find profits growth somewhere, and if it’s not going to be a secular tailwind like fiscal spending and loose monetary policy, you have to seek elsewhere.” I believe we’ll see some natural nuance in trading over the next three months as people seek growth in a more challenging economic environment.”

The good jobs report on Friday might give the Fed more confidence to stick to its aggressive rate-hiking plan this year to keep inflation under control while avoiding a significant slowdown in the economy. As per the consensus estimate from Dow Jones, around 490,000 jobs were added in March, following a 678,000 payroll increase in February.

According to Dow Jones, the jobless rate will drop to 3.7 percent from 3.8 percent.

After the meme stock and video game retailer disclosed its intentions for a stock split, GameStop soared more than 16 percent in extended trade.

The White House said on Thursday that it would release an unprecedented amount of oil from the Strategic Petroleum Reserve, causing energy prices to fall. For the following six months, up to 1 million barrels of oil per day will be discharged.

The ISM manufacturing index and the construction spending report will be released at 10 a.m. ET on Friday are two other key indicators to keep an eye on.

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