Friday’s session saw equity markets close with sustained losses: the DOW Jones -1.07% to 31,909.64, the S&P 500 -1.45% to 3,861.59, and the NASDAQ 100 -1.38% to 11,830,28.
The major stock market indexes all recorded declines at the end of the week. The Dow posted its most significant weekly decline since June, falling 4.44%. The S&P and Nasdaq also posted losses: the former fell 4.55% and the latter 4.71%.
Futures on the Dow Jones, S&P, and Nasdaq began Friday morning with sustained declines of about 0.7% from fair value. The yield on the 10-year Treasury was also down, reaching 3.82%, and the 2-year yield fell by 11 basis points to 4.79%.
Expectations for Friday were for February’s jobs report, released by the Department of Labor. The forecast was for an increase of 223,000 nonfarm payrolls. While this figure is significantly lower than January’s figure of 517,000 units, it would still have been perceived as a positive start to the year.
The unemployment rate was expected to remain at a record low of 3.4%, which has not been seen for over 53 years. The average hourly wage was expected to increase by 0.3%, while the annual wage increase was expected to reach 4.7%.
Europe’s stock markets opened lower on Friday after the sell-off in US bank stocks. The Labor Department’s jobs report, released Friday, indicated that the US economy created 311,000 jobs in February.
This figure beat expectations, despite the higher-than-expected unemployment rate of 3.6%. Econoday’s best record predicted 220,000 nonfarm jobs in February, with an unemployment rate of 3.4%.
Over the past month, hourly wages have increased by 0.24%, less than the 0.4% increase expected by economists in the Dow Jones survey. Year-over-year wage growth was 4.6%, slightly less than the estimated 4.8% increase.
The unemployment rate also rose from 3.4% to 3.6%, indicating a cooling in the labor market despite solid monthly payrolls. This information suggests that the labor market may not be as strong as previously thought based on recent employment data.
The yield on the 10-year US Treasury fell to 3.92% on Thursday, followed by a further decline to 3.77% on Friday following the jobs report’s release. Meanwhile, West Texas Intermediate futures fell 1% on Friday morning, extending the losing streak by three days.
WTI futures traded slightly below $75 a barrel on Friday. The stock market fell during the first trading session on Friday as downward pressure on bank stocks. This was primarily caused by Silicon Valley Bank’s recent woes, which resulted in significant losses in its bond portfolio.
Shares of SVB Financial fell significantly by 63% before being locked in pre-market trading on Friday. The bank had expected to raise more than $2 billion to offset losses from the bond sale, which caused the stock to drop initially.
According to sources cited by CNBC’s David Faber, the bank discussed selling itself after unsuccessful attempts to raise capital. The decline in shares of SVB Financial hurt the financial sector, with the SPDR S&P Regional Banking ETF down more than 4%.
In morning trading, several bank stocks, including First Republic, PacWest, and Signature Bank, were also down 38%, 25%, and 22%, respectively. Bank of America, Wells Fargo, and Goldman Sachs were down in morning trading by 4.5%, 2.6%, and 4%, respectively.
Price lists for Friday, 10 March 2023
DOW Jones -1.07% to 31,909.64
S&P 500 -1.45% to 3,861.59
NASDAQ 100 -1.38% to 11,830.28.