Here are five things you must know for Monday, April 4:
1. -- Stock Futures Edge Higher, Yield Curve Inversion Deepens
U.S. equity futures edged higher Monday, while the Treasury yield curve extended its inversion, as stocks enter something of a lull this week with jobs data in the rear view mirror and first quarter earnings season set to begin later this months.
Russia's invasion of Ukraine continues to hold sway over global markets, however, with reports of a move towards fresh sanctions on Moscow following the discovery of mass graves, civilian executions and what French President Emmanuel Macron called "clear clues" of war crimes by Russia troops.
The prospect of new sanctions kept markets muted in Europe, where a benchmark reading of consumer sentiment fell to the lowest levels since August of 2020 amid the region's record-high inflation and Covid overhang.
In the U.S., the spread between 2-year and 10-year Treasury note yields, which inverted for the first time since 2019 last week, extended to around 6 basis points in overnight trading as the market's traditional recession warning continues to suggest near-term weakness in the world's biggest economy.
That said, last week's jobs report was more likely to stoke inflationary concerns as opposed to growth prospects, with 431,000 new positions added, the headline unemployment rate falling to 3.6% and wage growth pegged at 5.4%.
Oil prices were modestly higher, pushed by ongoing supply concerns linked to the conflict in Ukraine as well as the temporary suspension of talks between the U.S. and Iran aimed at resolving a dispute over its nuclear development program that could lead to its return to global oil markets.
WTI crude futures for May delivery were marked 80 cents higher at $100.07 per barrel while Brent contracts for June, the global pricing benchmark, added 73 cents to trade at $105.12 per barrel.
On Wall Street, futures contracts tied to the Dow Jones Industrial Average indicating a 15 point opening bell gain while those linked the S&P 500, which ended the first quarter with a 4.95% decline, are are priced for a 5 point moved to the upside. Futures linked to the tech-focused Nasdaq are looking at a 47 point opening bell advance.
2. -- Week Ahead: Fed Minutes In Focus As Rate Bets Accelerate
Minutes of the Federal Reserve's March policy meeting will highlight a muted week for data and earnings releases as markets ride the lull between payrolls and the start of the first quarter reporting season.
With the CME Group's FedWatch now pricing in 50 basis point rate hikes for the Fed's next three meetings in May, June and July, even amid signs of a slowing economy, will weigh heavily on sentiment this week as Fed President's John Williams, Neel Kashkari, Lael Brainard, Jim Bullard and Raphael Bostic are all slated to speak between Tuesday and Thursday, with Fed minutes set for Wednesday at 2:00 pm Eastern time.
Trade data, as well as PMI and ISM readings for the services sector in March are expected on Wednesday, as well, following a slowdown in manufacturing activity last month linked to supply chain disruptions and surging input prices.
Constellation Brands (STZ) and ConAgra Brands (CAG) provide the week's sparse earnings updates ahead of the first quarter deluge expected to begin on April 12, with analysts expecting the growth rate for collective S&P 500 profits to slow from around 32% over the final three months of the year to around 6.4% for the first quarter.
3. -- Tesla Shares Bump Higher After Record Q1 Deliveries
Tesla (TSLA) shares moved higher in pre-market trading after the carmaker posted record first quarter deliveries over the weekend amid what CEO Elon Musk called an 'exceptionally difficult' start to the year.
Tesla delivered 310,048 new cars over the three months ending in March, the company said in a statement, up 67.8% from last year but just 0.5% higher than the 308,600 reached in the final three months of last year. Analysts were looking for a total of around 313,000.
Production actually fell, however, to 305,407 vehicles compared to the 305,840 tally recorded over the final three months of last year, thanks in part to supply chain disruptions and Covid-related closures at its Shanghai factory.
Tesla shares were marked 1% higher in pre-market trading to indicate an opening bell price of $1,095.40 each.
4. -- Starbucks To Suspend Share Buybacks Under CEO Howard Schultz
Starbucks (SBUX) shares slumped lower in pre-market trading after CEO Howard Schultz, in his first move as interim boss of the world's biggest coffee chain, suspended the group's stock buyback program.
Schultz, who stepped down as CEO in 2008 but served as executive chairman until 2018, returned to the helm following the surprise retirement of former CEO Kevin Johnson and vowed to employees to "work with all of you to design our next Starbucks ... where we work together to create a positive impact in the world."
Schultz said cash spent on buybacks would be better directed towards "investing more into our people and our stores", adding it is the "only way to create long-term value for all stakeholders."
Starbucks had said, under CEO Johnson in February, that it "stood by" its commitment to returning $20 billion to shareholders, in dividends and buybacks, over the next three years.
Starbucks shares were marked 1.1% lower in pre-market trading to indicate an opening bell price of $90.51 each.
5. -- Amazon Workers In Staten Island Vote To Form Union
Amazon (AMZN) shares edged higher pre-market trading after workers at the online retailer's Staten Island warehouse voted to unionize and demanded wage and working conditions talks begin before the end of next month.
The Amazon Labor Union, formed by workers in New York City who voted 55% in favor of unionization late Friday. The decision, a first for Amazon's 1.5 million-strong workforce, was hailed by U.S. President Joe Biden, who said the workers had "made their choice to organize a grassroots union, bargain for better jobs and a better life."
Amazon said it was "disappointed with the outcome of the election in Staten Island because we believe having a direct relationship with the company is best for our employees."
A union vote at Amazon's fulfilment center in Bessemer, Alabama was rejected, but disputed ballots and a challenge by the National Labor Relations Board could overturn that result.
Amazon shares were marked 0.4% higher in pre-market trading to indicate an opening bell price of $3,285.59 each.
