Stock futures, bond yields rise ahead of jobs report

Before the bell, GameStop was up 15%. The video game retailer said Thursday it would seek shareholder approval to increase its stock count.

AMC Entertainment film company,

another favorite of individual traders, rose 5.5% in fast trade. Dell Technologies edged down 0.8% after Goldman Sachs analysts cut their price target for the stock.

In overseas markets, the Stoxx Europe 600 rose 0.5%, driven by stocks of oil, gas and automotive companies. China’s Shanghai Composite Index rose 0.9%, Hong Kong’s Hang Seng edged up 0.2% and Japan’s Nikkei 225 slipped 0.6%.

In the bond market, the yield on benchmark 10-year Treasury bills rose to 2.414% from 2.324% on Thursday. Yields rise as bond prices fall. They have climbed for five of the past seven quarters as investors brace for the Federal Reserve to continue raising rates to stifle inflation.

Two-year yields, more sensitive to short-term interest rate expectations, rose almost as high, to 2.404%. When the two-year yield climbs above the 10-year yield, the yield curve is said to be inverted, which is often considered a predictor of recessions.

Concern over the economic outlook is one reason equities have had a rocky start to 2022. Investors are analyzing the rapid developments on the battlefield in Ukraine and their effects on the global economy and system. financial. Rising commodity prices fueling inflation are of particular concern to fund managers. Rising oil, grain and metal prices bolstered expectations that the Fed will end years of accommodative monetary policy that has propelled stocks higher.

For the Fed, a key factor in deciding how quickly to raise rates is the state of the labor market. Investors expect another bumper month of job growth when the Labor Department releases its report at 8:30 a.m. ET.

Economists polled by the Wall Street Journal estimate that employers added 490,000 jobs in March. That would mark 11 consecutive monthly gains above 400,000, the longest such stretch in records dating back to 1939.

The unemployment rate is rapidly approaching the February 2020 pre-pandemic rate of 3.5%, which was a 50-year low.

“The U.S. labor market is extremely tight,” said Jane Foley, head of currency strategy at Rabobank. “I don’t think anyone thinks the Fed is going to turn off the gas in the next few months.”

Underlining that inflationary pressures are not confined to the United States, consumer prices in the eurozone rose 7.5% in March from a year earlier, the highest level since the formation of the bloc monetary. Also on Friday, the Institute for Supply Management’s manufacturing gauge in the United States at 10 a.m.

European natural gas prices fell as traders’ nervousness over Russian President Vladimir Putin’s threat to cut exports eased. Mr Putin said in an interview broadcast on Thursday that Moscow would stop gas deliveries to “hostile states” unless they switched to payment in rubles by Friday. The policy has caused a standoff with Germany, a key importer of Russian gas, which refuses to pay in roubles.

Analysts said Russian gas flows to Europe were steady on Friday, helping to keep prices capped. Benchmark European gas futures edged down 2.9% to 122.27 euros, or $135.14, a megawatt-hour.

Elsewhere in commodities, Brent crude oil prices were flat at $104.74 a barrel. They remain on track to fall for the week, after the Biden administration announced plans to release up to 180 million barrels from the US Strategic Petroleum Reserve.

Write to Joe Wallace at [email protected]