Programming note: The Morning Market Wrap will not be published on Monday the 10th of April due to Easter public holidays, and will resume regular publication on Tuesday the 11th. US equities rose on Thursday after revised initial jobless claims pointed to a weakening labour market.
United States
For the week ending April 1st, initial jobless claims declined 18k to 228k, weaker than the 200k forecast with the prior week’s figure revised 48k higher to 246k. The revised figures take into account updated seasonal adjustments that raised the level of underlying claims. According to Bloomberg economists, claims have been artificially low stemming from pandemic-related problems in seasonal adjustments. Comparing the figures to pre-pandemic averages from 2019, both initial and continuing claims are running above average, pointing to a cooling job market. The data comes ahead of Friday’s non-farm payroll data which is forecast to show the number of employed grew at a slower pace in March at 230k compared to 311k in January. Further focus will also be on average hourly earnings, expected to have risen 4.3% over the 12 months, down from 4.6% in January while the unemployment rate is expected to remain steady at 3.6%.
The S&P500 gained 0.36% driven by gains in technology 0.68% and communications 1.71% while energy was the biggest laggard down -1.47% despite oil prices which were little changed. The Dow Jones was little changed, with the Russell 2000 up 0.13% along with the Nasdaq Composite 0.76% while the VIX retreated -3.56% to 18.40. US markets will be closed for a public holiday on Friday the 7th of April, resuming trading on Monday the 10th.
Europe
European stocks also advanced before the Easter holiday which will see most exchanges closed for both Friday the 7th and Monday 10th of April. The Euro Stoxx 600 gained 0.51% along with the DAX 0.50%, CAC 0.12%, and FTSE100 1.03%. Among individual movers, shares in TUI AG jumped 11.99% in London after the tour operator said it sees strong demand for the Easter holidays and capacity increases back to pre-pandemic levels this summer. Shares in Shell Plc rose 2.3% after its gas trading business delivered a strong performance for the year to date after a record profit in 2022. The company sees gas trading around similar levels to the prior quarter, which is seen as a positive given weaker gas prices.
*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.
Australia
The ASX is closed for the Easter holidays on both Friday and Monday, while ASX200 futures are 0.12% or 9 points higher at 7,248. The index weakened -0.25% on Thursday with most sectors lower as health care outperformed 1.68% while technology lagged -2.14%. Brambles (BXB) rose 0.59% after UBS increased its price target to $15.50 on expectations of improved cash flow. Shares in Magellan extended losses after recent fund outflows with shares down a further -3.7%.
Commodities
Oil prices are modestly higher overnight with both WTI and Brent crude up 0.11% and 0.15% respectively to US$80.70 and US$85.12 a barrel. Iron ore futures in Singapore extended a losing streak, down -0.29% on Thursday and a further -1.28% lower this morning at US$116 while copper is 0.73% higher. Gold is -0.63% lower at US$2,007 an oz while silver is modestly higher by 0.15% and Bitcoin -0.59% lower.
Economic Data
Friday 7th March
US Non-farm Payrolls (MoM Mar) 22:30
This article was written by Oliver Gordon, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3632.
