US stocks all closed with heavy losses on Thursday. The DOW Jones lost 1.66% to 32,254.86, the S&P 500 -1.85% to 3,918.32, and the NASDAQ 100 -2.05% to 11,338.35.
Dow Jones, S&P 500, and Nasdaq 100 futures fell 0.7% from the fair value on Friday morning, while 10-year and 2-year Treasury yields fell 10 and 11, respectively, basis points, 3.82%, and 4.79%.
The Labor Department is due to release its February jobs report on Friday, expecting nonfarm payrolls to rise by 223,000, a significant drop from January’s 517,000. However, it would be considered an excellent start to the year. The unemployment rate
should remain at 3.4%, the lowest recorded in the last 53 years. The average hourly wage is expected to increase by 0.3%, but the annual wage increase will reach 4.7%.
After statements by Federal Reserve Chairman Jerome Powell, which caused the indices to close slightly lower, the new information on the labor market has increased investors’ fears of a possible imminent rate hike. Data shows job openings fell in January, but not as much as initially expected.
Despite the central bank hike, February’s private payrolls report showed a stronger-than-expected economy. These results come ahead of the release of February’s employment data, following January’s success.
Meanwhile, Powell warned lawmakers in his Senate testimony on Wednesday that the central bank’s terminal rate could exceed earlier expectations due to continued robust economic data. Powell reiterated that concern during his Wednesday speech to the House Finance Services Committee.
Meanwhile, as reported by CME Group’s FedWatch tool, traders expect a rate hike at the next central bank policy meeting, which is shaping to be more significant than previously thought. Most traders, over 80%, suggest a hike of 50 basis points.
Last week, the Labor Department reported an unexpected increase in jobless claims, despite a very tight job market. For the week ending March 4, initial jobless claims were 211,000, up 21,000 from the prior period and above the Dow Jones estimate of 195,000. This is the highest total since 2023. The report was released on Thursday and is of concern to professionals.
After a week of dovish trading on Wall Street, Asia was trading positive on Thursday, during which Fed Governor Jerome Powell strongly reiterated the need to fight inflation. The positive sentiment was further strengthened by Chinese macro data, which showed sharp declines in consumer and producer prices after the cancellation of the zero Covid policy in December. On Thursday morning, the Nikkei was up 0.83%; Hong Kong was up 0.35%, and Shanghai was below par.
China’s annual resistance rate fell to 1.0% in February 2023 from 2.1% in January, lower than market forecasts of 1.9%, according to the National Bureau of Statistics data. %. This was the lowest reading recorded since February 2022. Food and non-food prices saw a significant slowdown as consumers continued to exercise caution, despite eliminating the zero Covid policy in December of last year. Furthermore, producer price deflation continued for five consecutive months.
Meanwhile, US stock futures fell ahead of the open on Thursday as traders read Federal Reserve Chairman Jerome Powell’s comments and awaited vital jobs data. Futures of the Dow Jones Industrial Average rose 82 points, or 0.25%, while those of the S&P 500 and Nasdaq-100 rose 0.2% each. Gold traveled at 1,818 dollars an ounce, and American WTI oil at 76.69 dollars a barrel.
Price lists for Thursday, March 9, 2023
DOW Jones -1.66% to 32,254.86
S&P 500 -1.85% to 3,918.32
NASDAQ 100 -2.05% to 11,338.35.