Stocks Turn Lower After U.S. Job Openings Near 2-year Low

Barry Adams
04 Apr, 2023
New York City

With changing narrative came the change in direction of stock prices. 

Market indexes traded lower after economic slowdown worries resurfaced.

The number of U.S. job openings fell by 632,000 to 9.9 million in February, the lowest since May 2021, the U.S. Bureau of Labor Statistics reported Tuesday.

The decline in job openings lowered the available jobs to workers ratio to 1.7 to 1 from 2 to 1. 

The Federal Reserve has been looking to cool the jobs market and after nine rate hikes finally the red hot employment market may be beginning to soften. 

Treasury yields turned lower after the release of jobs data and higher oil prices may convince policymakers to slow or even pause rate hikes.  

investors are worried that the regional bank crisis may not be over and higher rates may force small and mid-sized banks to focus on their balance sheets rather than increase lending to customers.   

Next week, first quarter earnings calls from banks may provide answers if banks are curtailing lending and rebuilding capital to counter rising unrealized losses in treasury securities in the held-to-maturity account.  

The Federal Reserve is scheduled to meet in less than four weeks and many bond investors are looking for the central bank to raise interest rates by 25 basis points and then pause for a while. 

The banking system stress and the surprise production cut from eight oil producing nations are going to add another layer of complexity for the policymakers in deciding the future trajectory of monetary policy. 

 

Indexes & Yields 

The S&P 500 index decreased 0.6% to 4,100.61 and the Nasdaq Composite index futures eased 0.5% to 12,126.33. 

The yield on 2-year Treasury notes decreased a fraction to 3.89%, 10-year Treasury notes inched up to 3.34% and 30-year Treasury bonds edged up to 3.60%. 

Crude oil decreased 6 cents to $80.35 a barrel and natural gas edged down 1 cent to $2.09 a thermal unit.  

 

U.S. Stock Movers 

Virgin Orbit Holdings Inc declined 18% to 16 cents after the rocket launch company filed for Chapter 11 bankruptcy protection in the U.S. 

The company sought bankruptcy protection in the district of Delaware after it failed to secure emergency funding and is looking to sell its assets. 

AMC Entertainment Holdings Inc plunged 27.5% to $3.69 after the company settled a shareholder lawsuit to proceed with exchanging its preferred stocks for common stocks. 

AMC's preferred equity units soared 22.9% to $1.83 after the company's recapitalization plan will issue more shares to preferred shareholders. 

The company will issue an additional one common share for every 7.5 preferred shares units, called APE units, held in connection with the planned conversion to common stock.  

The settlement consideration includes additional 6.9 million common shares which will be distributed to holders of preferred units prior to conversion.  

The settlement was announced by lawyers representing the stockholders group. 

 

European Indexes Hovered Around One-year Highs 

Benchmark indexes in the Euro Area trimmed early gains and two inflation reports showed weakening trends in the region. 

Wholesale price inflation in the eurozone slowed in February after energy prices cooled further. 

Moreover, a survey from the European Central Bank showed that consumers lowered their expectations of inflation in February. supporting the weakening inflation trend. 

Moreover, Germany's exports continued to climb at a steady pace on the back of sustained demand from the U.S. and China. 

Weaker-than-expected U.S. manufacturing growth and the number of job openings declined to the low last seen in may 2021 also encouraged investors that inflation trends are easing in the largest economy in the world. 

 

Germany's International Goods Trade Surplus Stable 

German international trade showed steady growth from the previous month and a year ago in February, the Federal Statistics Office said Tuesday. 

February goods exports adjusted for seasonal and calendar factors increased 4.0% from the previous month and rose 7.6% from a year ago to Є136.7 billion. 

Goods imports in February adjusted for seasonal and calendar factors increased 4.6% from the previous month and 3.8% from a year ago to Є120.7 billion. 

From a year ago, exports growth more than halved to 6.3% in February from 12.8% in the previous month and imports rose 2.6%, weaker than the  9.1% surge in January. 

International goods trade surplus was stable from the previous month and jumped 49.7% from a year ago to Є16.0 billion. 

 

Eurozone Wholesale Inflation Slowed In February  

Wholesale prices in the eurozone slowed further in February after energy prices continued to slide, the latest report from Eurostat indicated Tuesday. 

Producer price index, a measure of wholesale prices, increased 13.2% in February after rising at 15.1% in January, the slowest increase since a 12.4% rise in January 2021. 

Excluding energy, producer price increase slowed to a moderate pace of 10.2% in the month from 11.1% in the previous month. 

Energy price increase slowed to 17.4% in the month after January's 20.7% rise in January. 

Intermediate goods inflation slowed to 9.3% from 11.2% in the previous month. 

On a monthly basis, the producer price index declined 0.5% in February after energy prices decreased 1.6% 

 

Europe Indexes & Yields 

The DAX index increased 0.1% to 15,603.47, the CAC-40 index declined 1.0 points to 7,344.96 and the FTSE 100 index decreased 0.5% to 7,634.52. 

The yield on 10-year German Bunds edged up to 2.26%, French bonds rose to 2.75%, the UK Gilts to 3.43% and Italian bonds to 4.12%. 

The euro inched higher to $1.095, the British pound edged up to $1.25 and the Swiss franc to 90.82 cents.  

Brent crude oil gained 35 cents to $85.30 a barrel and the Dutch TTF natural gas fell Є4.02 to Є47.25 per MWh. 

 

Europe Stock Movers 

L'Oreal SA increased 0.9% to €419.25 after the France-based luxury products company agreed to acquire Australia's luxury brand Aesop from Brazil-based Natura & Co for an enterprise value of $2.53 billion. 

Natura plans to use proceeds to lower its debt and focus on Avon and The Body Shop businesses in Latin America. 

OKYO Pharma Ltd plunged 26.8% to 1.50 pence after the bio-pharma company announced its plan to delist its stock from the London Stock Exchange in May.  

NatWest Group PLC decreased 0.2% to 263.70 pence after the UK government extended the deadline to lowering its stake in the bank by two more years. 

Nordex Group SE decreased 0.3% to €13.15 after the German wind turbine maker won a 106 MW wind project in Lithuania from E energija group.