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Main U.S. indexes decline; S&P 500 banks index down ~1%
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Financials weakest S&P 500 sector; healthcare leads
gainers
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Euro STOXX 600 index down ~1.7%
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Dollar down >1%; gold up ~2%, crude edges up; bitcoin off
>2%
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U.S. 10-Year Treasury yield collapses to ~3.70%
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MAD DONKEY...BIT HARSH ON THE DONKEY (1032 EST/1532 GMT) BofA's 'Heard on the Street' anecdote went with a little horse play this week - "Like watching a mad donkey thrashing around in a field bouncing off all the fences… investor on stock market of 2023." Probably a bit harsh on the poor donkey though if Friday's market melee related to Silicon Valley Bank is any gauge of sanity. BofA's always-insightful Flow Show weekly note went on to show that investments in U.S. money market funds have soared to a new all-time high of $4.9 trillion, as rising interest rates have leave boring old cash looking pretty rewarding these days. It certainly better for the pulse rate than banks that bankroll tech startups too.
(Marc Jones)
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U.S. STOCKS STAGGER AS BANK BATTERING CONTINUES (1002 EST/1502 GMT) The main U.S. stock indexes are lower early on Friday dragged down by bank stocks, while investors weighed cooling February wage growth data to determine future interest rate hikes from the Federal Reserve. In any event, bank stocks remain especially weak with the S&P 500 banks index sliding nearly 2%, bringing its week-to-date decline to nearly 13%. With this, it is on pace for its biggest weekly drop since March 2020. That said, the banks index was down as much 4.4% earlier in Friday's session.
Of note, the U.S. 10-Year Treasury yield's six week win streak looks set to come to an end. The yield is plunging to the 3.70% area. It closed at 3.9630% last Friday. Additionally, implied volatility is jumping. The VIX has hit its highest level since mid December. Meanwhile, the S&P 500 index , now around 3,905, is flirting with the former resistance line from its January 2022 record high, which should now provide support at around 3,895. The SPX's low so far on Friday was 3,878.01. Traders will be looking to assess the SPX vs this line into the close. The Jan. 10 low was at 3,877.29 and the 38.2% Fibonacci retracement of the March 2020-January 2022 advance is at 3,815.20. May 2022 and December 2022 lows were in the 3,810-3,764 area.
Here is a snapshot of where markets stood just shortly after 1000 EST:
(Terence Gabriel)
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U.S. STOCK FUTURES RISE AFTER JOBS DATA, AND AMID BANK
JITTERS (0900 EST/1400 GMT)
U.S. equity index futures are rising slightly in the wake of
the release of the latest data on U.S. employment.
The February non-farm payroll headline jobs number came in
at 311k, which was above the 205k estimate. However, the
unemployment rate was 3.6% vs a 3.4% estimate. Of note, wage
data, on a month-over-month and year-over-year basis, was cooler
than expected:
The data has eased rate-hike fears somewhat. According to the CME's FedWatch Tool , the probability of a 25 basis point rate hike at the March FOMC meeting is now 56% from 41% just before the numbers were released. There is now around a 44% chance of a 50-basis-point hike from around 59% prior to the data coming out. CME e-mini Nasdaq 100 futures are leading U.S. equity index futures higher, gaining around 0.6%. Amid bank jitters, the futures were around flat just before the numbers came out.
A majority of S&P 500 sector SPDR ETFs are higher in premarket trade, though all moves are relatively modest. Tech is showing the biggest gain, up around 0.5%, while financials are posting the biggest loss at 0.6%. Regarding the jobs data, Adam Sarhan, chief executive at 50 Park Investments, said, "The jobs report is confirming what Powell told us earlier in the week... that the Fed has more work to do before we can get inflation under control." Sarhan added "In bear markets, like we are in now, it's sell the rumor and buy the news. So they sold first and are now buying. Also, technically, the S&P 500 is bouncing off of critical support. If the level is defended, that's going to be somewhat bullish here." Here is a premarket snapshot just shortly before 0900 EST:
(Terence Gabriel, Caroline Valetkevitch)
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FOR FRIDAY'S LIVE MARKETS POSTS PRIOR TO 0900 EST/1400 GMT - CLICK HERE
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
