Stocks Modestly Lower as U.S. Job Openings Fall to a 1-3/4 Year Low

What you need to know…

The S&P 500 Index ($SPX) (SPY) today is down -0.26%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.38%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.04%.

U.S. stock indexes this morning are modestly lower.  Stocks are under pressure on economic concerns after today’s U.S. economic news showed Feb JOLTS job openings fell to their lowest in 1-3/4 years.  However, the weaker-than-expected JOLTS report pushed bond yields lower and limited losses in the broader market.

Today’s weaker-than-expected Feb JOLTS job opening, along with Monday’s economic news that showed the U.S Mar ISM manufacturing index contracted more than expected has bolstered expectations that the Federal Reserve may be approaching the end of its interest rate hike campaign.

U.S. Feb JOLTS job openings fell -632,000 to a 1-3/4 year low of 9.931 million, showing a weaker labor market than expectations of 10.500 million.

U.S. Feb factory orders fell -0.7% m/m, weaker than expectations of -0.5% m/m.

Citigroup said that about $20 billion of new long positions in the S&P 500 were added over the past week, with positioning turning clearly bullish.  Also, there's still $15 billion of losing short positions to clear, which could support the market in the near term.

Global bond yields this morning fell back from early highs and turned mixed on the weaker-than-expected U.S. Feb JOLTS job openings report.  The 10-year T-note yield fell to a 1-week low and is down -4.5 bp at 3.367%.  The 10-year German bund yield is up +0.8 bp at 2.263%.  The 10-year UK gilt yield is up +1.2 bp to 3.442%. 

Overseas stock markets are higher.  The Euro Stoxx 50 today is up by +0.27%.  China’s Shanghai Composite stock index closed up +0.49%, and Japan’s Nikkei Stock Index closed up +0.35%. 

Today’s stock movers…

Regional bank stocks are under pressure today. First Republic Bank (FRC) is down more than -6% to lead losers in the S&P 500.  Also, Zions Bancorp (ZION) is down more than -4%.  In addition, Comerica (CMA) and KeyCorp (KEY) are down more than -3%.  Finally, Lincoln National Corp (LNC) and Truist Financial (TFC) are down more than -2%.

Acuity Brands (AYI) is down more than -8% after reporting Q2 net sales of $943.6 million, weaker than the consensus of $958.6 million.

Charter Communications (CHTR) is down more than -2% to lead losers in the Nasdaq 100 after KeyBanc Capital Markets downgraded the stock to sector weight from overweight.

Boeing (BA) is down more than -2% after Northcoast Research downgraded the stock to sell from neutral. 

Allegion Plc (ALLE) is down more than -3% after Citadel Advisors LLC reported that it took a net short position of 1.11 million shares, or 1.26% of the company’s stock as of April 3.

Etsy (ETSY)  is up more than +4% to lead gainers in the S&P 500 after Piper Sandler upgraded the stock to overweight from neutral. 

ServiceNow (NOW) is up more than +3% after Robert Baird & Co upgraded the stock to outperform from neutral.

Extra Space Storage (EXR) is up more than +2% after Raymond James added the stock to its favorite ideas list and upgraded the stock to a strong buy from outperform.

Prudential Financial (PRU) is up more than +1% after JPMorgan Chase upgraded the stock to overweight from neutral.

Fastenal (FAST) is up more than +1% after Stifel initiated coverage of the stock with a buy rating and a price target of $61. 

Across the markets…

June 10-year T-notes (ZNM23) today are up +18 ticks, and the 10-year T-note yield is down -4.5 bp at 3.367%.  June T-notes this morning recovered from early losses and climbed to a 1-week high, and the 10-year T-note yield fell to a 1-week low of 3.359%.  T-note prices erased early losses and moved higher after the Feb JOLTS job openings report fell more than expected to a 1-3/4 year low. 

The dollar index (DXY00) today is down by -0.51%.  The dollar today extended Monday’s losses down to a 2-month low.  A rally in EUR/USD to a 2-month high today is undercutting the dollar.  Also, lower T-note yields today are bearish for the dollar.  Losses in the dollar accelerated on signs of weakness in the U.S. labor market after Feb JOLTS job openings fell to a 1-3/4 year low.

EUR/USD (^EURUSD) today is up by +0.55% and posted a 2-month high. Dollar weakness today is supporting gains in the euro.  Also, signs of strength in Germany’s economy is supportive for EUR/USD after German Feb exports posted their biggest increase in 10 months.  Gain in the euro today are contained after the ECB reported that consumer inflation expectations fell in February for a second month, a dovish factor for ECB policy. 

Eurozone Feb PPI eased to +13.2% y/y from +15.1% y/y in Jan,  better than expectations of +13.3% y/y and the slowest pace of increase in 19 months.

German Feb exports rose +4.0% m/m, stronger than expectations of +1.8% m/m and the largest incresae in 10 months.

The ECB reported that consumer inflation expectations eased for second month in Feb, with 12-month inflation expectations easing to 4.6% from 4.9% in Jan, and 3-year inflation expectations in Feb easing to 2.4% from 2.5% in Jan.

USD/JPY (^USDJPY) today is up by +0.11%.  The yen today is under pressure from higher T-note yields. Also, a rally in the Nikkei Stock Index today to a 3-week high has curbed the safe-haven demand for the yen.

June gold (GCM3) this morning is up +27.4 (+1.87%), and May silver (SIK23) is up +1.059 (+4.41%).  Precious metals prices this morning are sharply higher, with gold posting a 1-year high and silver climbing to a 2-month high.  Today's decline in the dollar index to a 2-month low is bullish for metals.  Also, a fall in the 10-year T-note yield to a 1-week low is supportive for metals.  In addition, metals prices rallied after today’s economic news showed U.S. Feb JOLTS job openings fell more than expected, which may prompt the Fed to keep from further raising interest rates.

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