US stocks pulled back from an earlier advance while Treasury yields slipped as investors seeking signs of a cooling labor market read into a surprise spike in jobless claims.
(Bloomberg) — US stocks pulled back from an earlier advance while Treasury yields slipped as investors seeking signs of a cooling labor market read into a surprise spike in jobless claims.
S&P 500 eased off its gains while the tech-heavy Nasdaq peeled back from an much as 1% climb. The dollar slumped against a basket of currencies while short-term Treasury yields tumbled.
Cryptocurrencies slid with Bitcoin falling to the lowest in nearly a month after the crypto-tied bank Silvergate Capital Corp. collapsed overnight amid growing scrutiny in Washington. Financial stocks slumped.
Thursday’s data showed weekly jobless claims had risen to 211,000 during the week ending March 4, ahead of expectations for 195,000 and marking the first time claims surpassed 200,000 since early January.
“We have the highest number of people collecting claims in more than a year,” Peter Boockvar, author of the Boock Report said. “The labor market might just be on the cusp of an inflection point.”
The numbers follow Wednesday’s job openings print which came in on the hot side and set the stage for Friday’s monthly jobs report, with even just slightly stronger-than-forecast figures expected to cement bets for a bigger hike at the March 21-22 Fed meeting. Economists project a 225,000 increase in February payrolls, about half January’s blockbuster pace, but a figure in that range would confirm the US economy continues to add jobs at a strong rate.
A softer-than expected number could well soften wagers on a half-point move in March, and tilt back to the quarter-point earlier expected.
“We do expect demand for workers to ease as the effects of restrictive monetary policy take hold and spread more broadly through the economy,” Rubeela Farooqi, chief US economist at High Frequency Economics, wrote. “But for now, layoffs remain low and job growth is strong, given companies appear to be hoarding workers, having struggled with labor shortages and staffing issues that are persisting.”
Two-year yields’ premium over their 10-year equivalent narrowed after the data to around 102 basis points, having surpassed 110 basis points earlier this week. The inversion is considered a reliable recession harbinger.
Key events this week:
- Bank of Japan policy rate decision, Friday
- US nonfarm payrolls, unemployment rate, monthly budget statement, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.2% as of 11:12 a.m. New York time
- The Nasdaq 100 rose 0.6%
- The Dow Jones Industrial Average rose 0.2%
- The Stoxx Europe 600 fell 0.2%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.2% to $1.0569
- The British pound rose 0.5% to $1.1907
- The Japanese yen rose 0.7% to 136.40 per dollar
Cryptocurrencies
- Bitcoin fell 1.7% to $21,634.36
- Ether fell 1.1% to $1,535.83
Bonds
- The yield on 10-year Treasuries declined two basis points to 3.97%
- Germany’s 10-year yield was little changed at 2.64%
- Britain’s 10-year yield advanced two basis points to 3.79%
Commodities
- West Texas Intermediate crude rose 0.5% to $77.05 a barrel
- Gold futures rose 0.7% to $1,831.90 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sujata Rao, Farah Elbahrawy and Brett Miller.
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