Five things you need to know before the market opens on Monday April 10:
1. -- Stock Futures Edge Higher As Traders Dig Through March Jobs Report
U.S. equity futures edged higher Monday, while the dollar held steady against its global peers, as investors get their first chance to react to Friday's March jobs report and prep for a key inflation reading later in the week.
The U.S. economy added 236,000 new jobs last month, a figure that takes the year-to-date tally to just over 1 million, with the Bureau of Labor Statistics revising its February estimate higher and its January figure lower. Wage data was also mixed, with average hourly earnings rising 0.3% on the month, matching Street forecasts, but slowing to 4.2% on the year compared with the 4.6% pace recorded in February.
"Reading between the lines the moderate declines in specific sectors such as manufacturing and construction should be an encouraging sign to the Fed some effects of monetary policy are starting to take hold," said Charlie Ripley, senior investment strategist for Allianz Investment Management in Minneapolis. "The data shouldn’t do much to sway the Fed in either direction, but taken in conjunction with recent job openings data and weaker survey based data, the argument for a pause in rate hikes is building."
Still, the odds of a March hike remain firm, with the CME Group's FedWatch indicating a 64% chance the Fed will lift its target rate to between 5% and 5.25%, although the market is also forecasting a September Fed cut as the economy turns south over the summer months.
Benchmark 10-year Treasury note yields were marked 3.363% in thin overnight trading, with many markets in Europe closed for the final Easter observances, while 2-year note yields were last seen trading at 3.931%.
The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, was marked 0.08% lower at 102.013 after hitting a two-month of low 101.40 prior to Friday's jobs data.
Heading into the start of the trading day on Wall Street, futures contacts tied to the S&P 500 are priced for a modest 1.5 point opening bell gain and those linked to Dow Jones Industrial Average are looking at a 25 point bump. Contacts tied to the tech-focused Nasdaq are indicating a 10 point decline.
Overnight in Asia, the MSCI ex-Japan index was marked 0.18% higher into the close of trading while Japan's Nikkei 225 gained 0.42% in Tokyo.
2. -- Week Ahead: Inflation Data, Big Bank Earnings In Focus
Investors are likely to focus on a key inflation release later this week, as well as the unofficial start to the first quarter earnings season, for clues as to whether stocks can continue their impressive year-to-date gains in the face of mounting recession concerns.
JPMorgan, Citigroup (C) and Wells Fargo (WFC) will form a trio of banks reporting first quarter profits before the market opens on Friday, with Dow component UnitedHealth (UNH) kicking things off that say day with its March quarter update at 6:00 am Eastern time.
Collective S&P 500 profits are expected to fall 5.2% from last year to a share-weighted $419.1 billion, with the second quarter tally expected to show a year-on-year decline of around 4%.
Wednesday's March inflation reading, however, will likely have more market impact as investors look to any signals of consumer price cooling following Friday's mixed March jobs report and a series of weaker-than-expected labor market readings.
Economists are forecasting headline inflation will slow to an annualized rate of 5.2%, with the closely-tracked core reading at 5.5%, compared to readings of 6% and 5.5% respectively over the month of February.
Producer price inflation figures are expected Thursday, alongside the regular weekly jobless claims release, with the Commerce Department's March retail sales report slated for Friday at 8:30 am Eastern time.
3. -- First Republic Suspends Preferred Dividend Ahead of Q1 Earnings
First Republic (FRC) shares moved lower in pre-market trading after the lender and wealth manager said it would suspend dividend payments on its preferred stock.
First Republic, which paused common stock dividends last month, said suspending preferred share payouts was a "measure of prudent oversight" ahead of its first quarter earnings on April 24.
First Republic is reportedly still looking to raise capital in order to shore-up its balance sheet, and it also considering selling some of its valuable loan book following a coordinated effort by a group of 11 banks, lead by JPMorgan (JPM) CEO Jamie Dimon, to add $30 billion to the lender's deposit base last month
First Republic shares were marked 1.6% lower in pre-market trading to indicate an opening bell price of $13.81 each.
4. -- Tesla Confirms Shanghai 'Megapack' Battery Plant Plans
Tesla (TSLA) shares edged modestly higher in pre-market trading after the carmaker confirmed plans to build a major battery production site in Shanghai.
The move, which deepens Tesla's investment in China amid rising tensions between Washington and Beijing, will see Tesla adding to its Shanghai 'gigafactory' later this year as it ramps-up battery production already underway in Lathrop, California.
The new Shanghai factory will produce around 10,000 so-called 'megapack' units each year from 2024, the company said, a tally level to the firm's California output.
Tesla will publish its first quarter earnings on April 19, after the market closes, with analysts looking for a bottom line of 85 cents per share on revenues of $23.375 billion.
Tesla shares were marked 0.14% higher in pre-market trading to indicate an opening bell price of $185.40 each..
5. -- Pioneer Shares Leap On Report of Exxon Takeover Talks
Pioneer Natural Resources (PXD) shares moved firmly higher in pre-market trading following reports of possible takeover interest from Exxon Mobil (XOM).
The Wall Street Journal reported late Friday that Exxon has held informal talks with the Irving, Texas-based shale producer about a possible acquisition, with the paper citing the group as a "top target" for the use of its recent windfall profits from last year's energy price surge.
Exxon posted record profits of $56 billion last year, with fourth quarter earnings powered by both a jump in crude and a surge in U.S. gas prices. CEO Darren Woods said the group would "continue to invest in our advantaged projects to deliver profitable growth" while remaining focused on cost cuts.
Pioneer, for its part, denied a February report that it was linked to merger talks with rival producer Ranger Resources (RRC), saying at the time that it is "not contemplating a significant business combination or other acquisition transaction."
Pioneer shares were marked 6.6% higher in pre-market trading to indicate an opening bell price of $221.89 each.
