Here are five things you need to know for Friday, May 6:
1. — Stock futures fall, with volatility rising, ahead of jobs report
U.S. stock futures fell slightly at the start of Friday’s session, though investors brace for another see-saw session on Wall Street as volatility gauges jump, the dollar soars and as Treasury yields climb ahead of a key reading in the domestic job market ahead of the start of trading.
The past two sessions on Wall Street, in fact, have seen the biggest swings in US equities in more than two years, with the S&P 500 rising the most since April 2020 and Wednesday after taking a dovish stance on rising interest rates. 50 basis points from the Federal Reserve. , and the Dow plunging more than 1,000 points for its biggest one-day drop since October 2020 on Thursday.
The same is also possible on Friday, with the CBOE’s benchmark volatility index, the VIX, trading up 27% to 32.5 points, the highest since early March.
Investors are also proving seriously concerned about the credibility of Fed Chairman Jerome Powell, who sparked Wednesday’s rally in part by pointing out that the central bank was “not actively considering” a 75 basis point rate hike. basis in June. The CME Group’s FedWatch tool, however, suggests that rate traders are placing a 91.5% probability on such a move six weeks from now.
It pushed the US dollar index, which tracks the greenback against a basket of six global currencies, to a new 20-year high of 100.04 in overnight trade, while benchmark yields 10-year Treasuries are hovering at the highest levels in three-and-a-half years and were last seen at 3.083%
Oil was also back on the march after hitting a five-week high yesterday following OPEC’s decision to maintain its trajectory for modest output increases over the next few months as cartel members fret over the fall in demand in China linked to its current Covid crisis.
WTI futures for June delivery rose $1.77 to $110.03 a barrel while Brent contracts for July added $1.79 to trade at $112.70 a barrel.
Last night’s selloff on Wall Street, which extended the S&P 500’s year-to-date decline to around 13%, quickly spread to the Asian session, with the MSCI regional index ex-Japan falling by 2.77%. European stocks fared only marginally better, with the Stoxx 600 down 1.14% at the start of the Frankfurt session and Britain’s FTSE 100 down 0.76% in London.
Back on Wall Street, futures tied to the Dow Jones Industrial Average point to a 40-point opening bell drop ahead of the April jobs report at 8:30 a.m. EST, while those tied in the S&P 500 are rated for a 10 point retreat. Futures linked to the technology-focused Nasdaq are eyeing an opening low of 40 points.
2. — Jobs Friday: Wages take center stage as Fed warns of tightening labor market
According to analysts’ forecasts for Friday’s April jobs report, U.S. employers likely added nearly 400,000 new jobs to the economy last month, driving the overall employment rate to a multi-multiple low. decades of 3.5%.
The numbers, however, belie one of the most complicated labor markets in US history, marked by a record rate of job quits during the month of March, and data showing that some 11, 55 million jobs remain unfilled in the world’s largest economy.
These figures seem difficult to reconcile with the fact that around 93% of jobs lost during Covid have been recovered, suggesting a short-term slowdown in hiring later this year. Or, as evidenced by companies like Amazon (AMZN) – Get the report from Amazon.com, Inc.Target (TGT) – Get target company report and Starbucks (SBUX) – Get the Starbucks Corporation reportlarge wage increases will be needed to get recalcitrant workers back into the labor market, which will add so-called “second-round” inflationary effects to accompany soaring food and energy prices.
“The latest data tells us that there are twice as many job vacancies as there are unemployed, which illustrates the tightness of the labor market as highlighted at the recent Fed press conference,” said Jeffrey Roach, chief economist for LPL Financial. While the latest ISM surveys point to a slowdown in job creation and April could be the first month of that slowdown.”
3. — Boeing shares superior advantage as Planemaker unveils move to Washington DC
Boeing (BA) – Get Boeing company report shares rose slightly in premarket trading after the world’s largest aircraft maker announced it would relocate its headquarters to suburban Washington, D.C.
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In a move widely seen as an effort to improve its relationship with regulators following a very public rebuke from the Federal Aviation Administration, as well as top lawmakers on Capitol Hill, Boeing will leave its Chicago hub, its base for 20 years. , for a new headquarters in Arlington, Virginia, a few miles from the Pentagon.
“We are excited to build on our foundation here in Northern Virginia. The region is strategic for our global headquarters given its proximity to our customers and stakeholders, and its access to world-class engineering and technical talent,” said CEO Dave Calhoun. “We greatly value our continued relationships in Chicago and throughout Illinois. We look forward to maintaining a strong presence in the city and state.”
Boeing’s confidence in a good relationship with the FAA, which criticized its safety and reporting procedures following the fatal 737 Max crashes in 2018 and 2018 that ultimately led to the firing of former CEO Dennis Muilenburg, was evident. in the group’s most recent report. earnings report.
The aircraft maker said it has submitted a certification plan to the FAA that it hopes could see it resume deliveries of 787 Dreamliners later this year, a move that mitigated the surprisingly large loss of about $1,000. $5 billion in the first quarter.
Boeing shares rose 0.15% in premarket trading to show an opening price of $150.70 each.
4. — DoorDash shares rise as delivery group sees strong near-term demand
DoorDash (HYPHEN) – Get the Class A report from DoorDash, Inc. Shares jumped in premarket trading after food delivery specialists reported stronger-than-expected first-quarter sales and released a strong near-term outlook for customer orders and overall business.
DoorDash said gross order value, its measure for subscription fees and customer orders, would likely hit the $50 billion mark this year, a modest increase from its previous forecast but strong enough in the face of changing consumer habits in a post-pandemic economy.
The increase follows a larger-than-expected first-quarter loss of 48 cents per share for the three months ending March, with revenue up 35% from a year ago to $1.5 billion. dollars.
“Just as consumers have the behavior of returning to restaurants and seeing friends and families again and eating together, and they also order delivery at the same time,” CEO Tony Xu told investors at a conference. telephone. Thusday. “Restaurants notice it too.”
DoorDash shares rose 6.4% in premarket trading to show an opening price of $77.80 each.
5. — Zillow shares tumble on soft outlook as mortgage rates rise
Zillow (ZG) – Get the Class A report from Zillow Group, Inc. Shares fell in premarket trading after the online real estate platform forecast weaker-than-expected short-term earnings amid soaring residential mortgage rates that could trigger a broader housing market downturn.
Zillow said revenue for the three months ending June would likely hit around $1 billion, why less than the Wall Street consensus of $1.8 billion and down from the $4.26 billion recorded. in the first trimester.
U.S. 30-year fixed mortgage rates hit a 13-year high of 5.27% last week, data from Freddie Mac showed, a move that compares with a rate of just 2.96% from at the same time last year. Sales of new and existing homes are also slowing and the Fed’s rate hike path suggests that borrowing costs will continue to rise at least through the end of the year.
“With widely varying forecasts, one thing is clear about the housing market in 2022 and that is that the way forward is uncertain.” Zillow said in a letter to shareholders. “While it is clear that people still have a strong interest in moving, growth trends in the total value of consumer transactions are moderating.”
Zillow shares were marked 10% lower in premarket trading to show an opening price of $35.15 each.