Yardeni Research President Ed Yardeni and Evercore ISI Chairman Ed Hyman provide insight into economic growth, today’s markets and the Federal Reserve.
U.S. stock futures jumped after the better-than-expected February jobs report sent bond yields soaring.
The U.S. economy added 379,000 jobs in February as the unemployment rate ticked down to 6.2%, according to the Labor Department. Economists surveyed by Refinitiv were anticipating the addition of 182,000 jobs as the unemployment rate to hold steady at 6.3%.
The strong report caused the 10-year yield to climbed to 1.63%, its highest level in a year. At that level, the 10-year yield is above the S&P 500’s dividend yield.
Dow Jones Industrial Average futures were higher by 215 points, or 0.69%, while S&P 500 futures and Nasdaq futures climbed by 0.53% and 0.25%, respectively.
Friday’s rally comes a day after Federal Reserve Chairman Jerome Powell said the central bank would remain patient if inflation were to return. That caused bond yields to rise which led to selling in equities, especially growth stocks, pushing the Nasdaq Composite to the brink of a correction, or down at least 10% from its recent peak.
In stocks, technology names sensitive to a continued rise in bond yields remain under scrutiny.
Meanwhile, Chevron Corp. agreed to buy the remaining shares of Noble Midstream Partners LP that it does not already own in a deal that values the pipeline operator at $1.32 billion. Noble Midstream shareholders will receive 0.1393 Chevron shares for each Noble Midstream unit they own.
In earnings, Costco. Co. reported stronger-than-expected quarterly revenue as online sales soared 76% year over year as the shop-from-home trend continued amid the COVID-19 pandemic. Earnings, meanwhile, fell short of estimates as costs rose as a result of wage increases for frontline workers.
Gap Inc. forecast sales will normalize to pre-pandemic levels in the second half of the year as people return to the office. The retailer sees sales increasing by a mid- to high-teens percentage compared with 2020.
Elsewhere, Virgin Galactic Holdings Inc. Chairman Chamath Palihapitiya sold his entire personal stake in the company for $213 million. Palihapitiya and his partner Ian Osborne still own a 6.5% stake through the investment firm Social Capital Hedosophia.
Norwegian Cruise Line Holdings Ltd. announced plans for a 47.58 million share offering. The cruise line operator plans to use the proceeds to retire debt.
In commodities, West Texas Intermediate crude oil climbed $1.61 to $65.44 per barrel while gold fell $8 to $1,692.70.
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Overseas markets were mostly lower.
In Europe, Germany’s DAX 30 was down 0.53% while France’s CAC 40 declined 0.36%. Britain’s FTSE 100 outperformed, advancing 0.41%.
Asian markets all lost ground with Hong Kong’s Hang Seng index sliding 0.47%, Japan’s Nikkei 225 falling 0.23% and China’s Shanghai Composite slipping 0.04%.
