Stock Futures Poised to Take a Breather

Labor productivity fell to its lowest level since 1947

Deputy Editor
May 5, 2022 at 9:05 AM
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Stock futures are taking a step back from the Fed-induced gains of the previous session. Futures on the Dow Jones Industrial Average (DJIA) are set to open 160 points lower, while S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures are also sitting firmly below fair value. There's plenty of economic data to unpack this morning; weekly jobless claims rose by 19,000 to 200,000, marking the biggest weekly rise since July.

Nonfarm productivity, which measures output against hours worked, fell 7.5% during the first quarter -- its biggest decline since the third quarter of 1947. Labor costs rose 11.6% for the quarter and 7.2% in the past year, marking its largest gain since 1982. 

Continue reading for more on today's market, including:

  • Here's what Schaeffer's Senior Market Strategist Bryan Sapp had to say about the recent rate hikes
  • Another look at Starbucks stock after its mixed earnings report. 
  • Plus, SAVE tumbles after earnings; Musk secures Twitter funding; and ETSY's weak current-quarter outlook.  

futures may 5

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.23 million call contracts traded on Wednesday, and 712,207 put contracts. The single-session equity put/call ratio rose to 0.58, and the 21-day moving average fell to 0.58.
  2. The shares of Spirit Airlines Incorporated (NYSE:SAVE) are down 2% ahead of the bell after the flight firm posted first quarter losses that were wider than analysts' estimates, and a revenue miss as well. The stock recently gapped back below its year-to-date breakeven as investors await the outcome of the JetBlue buyout talks.
  3. Elon Musk laid out his $7.2 billion in financing commitments he is making in order to purchase Twitter Inc (NYSE:TWTR). The social media stock is up 2.2% this morning in response, building on its 15% year-to-date lead. 
  4. Etsy Inc (NASDAQ:ETSY) is suffering wide premarket losses, last seen down 12.7% as investors looked past a first-quarter earnings and revenue beat to Etsy's weaker-than-expected current-quarter forecast as disposable income for its customers drops amid rising inflation. Etsy stock has lost 40.8% in the past 12 months. 
  5. The economic calendar will also feature unit labor costs today. 

Buzz May 5

Dismal Economic Data Out of China Weighs on Markets

Asian markets were mixed on Thursday, as investors brushed off dismal economic data out of China. Specifically, the Caixin services Purchasing Managers’ Index (PMI) fell to 36.2 in April, pointing to a shrinking services sector. Traders also weighed the Fed’s decision to institute the biggest interest rate hike in 22 years. As a result, Hong Kong’s Hang Seng shed 0.4%, even after the U.S. Securities and Exchange Commission (SEC) added JD.com (JD) and Bilibili (BILI) to a list of companies that could face delisting. Elsewhere, China’s Shanghai Composite added 0.7%, while Japan’s Nikkei and South Korea’s Kospi were both closed.

European markets are rallying, on the other hand, after U.S. Fed Chairman Jerome Powell eased fears of sharper rate hikes in the future. Meanwhile, the Bank of England (BoE) raised interest rates to 13-year highs, in an attempt to contain surging inflation. Plus, investors are unpacking earnings reports from Shell, BMW, and Air France KLM, among others. At last check, France’s CAC 40 is up 2%, the German DAX is 1.7% higher, and London’s FTSE 100 is eyeing a 1.6 % pop.

 




 
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