Hopeful Investors See Signs of Rate Pause In Two Latest Jobs Reports

Barry Adams
06 Apr, 2023
New York City

Stocks faced headwinds on the final trading day of the holiday-shortened week. 

Investors were cautious  and focus remained on labor markets as additional reports showed today gradual weakening trends in still tight labor market conditions. 

Initial jobless claims for the week ending on April 1 declined 18,000 to 228,000, the U.S. Department of Labor said in its weekly report Thursday. 

Jobless claims for the previous week were sharply revised higher to 248,000 from the first estimate of 196,000, reflecting a change in the methodology of adjusting for seasonality.    

U.S. based employers cut jobs for the third month in a row, according to a report released by Challenger, Gray & Christmas, Inc on Thursday. 

Employers announced 89,703 job cuts in March, 15% higher than 77,770 in February and soared 319% from 21,387 a year ago. 

The job cuts were higher from a year ago for the third month in a row. 

Employers announced 270,416 cuts in the first quarter, a 396% increase from the 55,696 cuts announced a year ago and the highest first quarter total since 2020 when 346,683 were announced. 

The sharp jump in job cuts in March and in the first quarter also comes after months of payroll expansions in 2021 and 2022 but businesses are now shifting gears and preparing for economic slowdown in the face of weakening consumer demands driven by rising interest rates and elevated inflation. 

Hopeful investors are looking for the Federal Reserve to interpret the latest signals from labor markers and pause rate hikes after the next policy meeting in early May. 

 

Indexes & Yields

The S&P 500 index increased 0..3% to 4,101.13  and the Nasdaq Composite advanced 0.7% to 12,084.23. 

The yield on 2-year Treasury notes inched lower to 3.76%, 10-year Treasury yield edged down to 3.27% and 30-year Treasury bonds to 3.54%.

Crude oil decreased 26 cents to $80.33 a barrel and natural gas fell 9 cents to $2.06 a thermal unit. 

 

Stock Movers 

FedEx Corp increased 1.5% to $233.49 after the company announced its restructuring plan and a change in executive compensation program. 

The parcel delivery company is looking to save $4 billion in costs by the fiscal year 2024 and realign its executive compensation packages that are more in line with shareholder interests. 

Bed Bath & Beyond Inc declined 7.4% to 31 cents  after the company proposed a reverse stock split plan so the struggling retailer can raise more equity capital. 

"We need to raise equity capital to have the necessary cash resources to fund operations and service obligations under our Credit Agreement,” the company said in a regulatory filing.