Five things you need to know before the market opens on Monday March 6:
1. -- Stock Futures Steady, Treasury Yields Slip Ahead of Key Market Test
U.S. equity futures edged lower Monday, following on for the strongest weekly gain in a month, as investors prepped for a series of tests over the next thirteen days that could make or break the market's solid year-to-date gains.
A pullback in Treasury bond yields Friday, coupled with solid ISM services sector data and a softer U.S. dollar, helped stocks to a roaring Friday close that lifted the S&P 500 past the 4,000 point mark and took the tech-focused Nasdaq to a near 2% gain for the session.
Markets look far more muted Monday, however, as investors brace for a twin set of appearances by Federal Reserve Chairman Jerome Powell in front of lawmakers in Washington, a key February jobs report and next week's CPI reading, all of which could alter analysts' forecasts on near-term rate hikes.
At present, traders are pricing in a 27.7% chance of a 50 basis point rate hike later this month in Washington, although San Francisco Federal Reserve Bank President Mary Daly echoed some of her colleagues in suggesting that she favors smaller hikes over a return to outsized increases during a weekend speech at at Princeton University.
Benchmark 10-year note yields were marked at 3.919% in overnight trading, with 2-year paper easing 4.846%, while the U.S. dollar index edged 0.11% against its global peers to 104.631.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 were indicating a 2 point opening bell gain ahead while those linked to the Dow Jones Industrial Average were indicating a 5 point dip. The rate-sensitive Nasdaq is looking at a 13 point gain.
Global oil prices also slipped lower in overnight trading, with WTI crude futures for April delivery falling $1.24 to $78.44 per barrel, following a softer-than-expected GDP target from China's National People's Congress that could suggest softer commodities demand over the coming months.
In overseas markets, Europe's Stoxx 600 rose 0.03% in early Frankfurt trading while Britain's FTSE 100 was marked 0.4% lower in London as mining and energy companies declined on the back of China's muted growth target.
Overnight in Asia, the region-wide MSCI ex-Japan index gained 0.47 heading into the close of trading, while the Nikkei 225 ended 1.11% higher in Tokyo to close at a 3 month high of 28,237.78 points.
2. -- Week Ahead: Powell Testimony, Jobs Data In Focus As Earnings Season Closes
Federal Reserve Chairman Jerome Powell's semiannual testimony on Capitol Hill this week highlights a crucial five-day period for stocks as investors search for direction amid a surge in Treasury bond yields, a red-hot job market and fading corporate profit outlooks tied to recession risk.
Powell will deliver the Fed's 'Semiannual Monetary Policy Report’ before the Senate Banking Committee on Tuesday, with a follow-up appearance before the House Financial Services Committee on Wednesday.
With the bulk of the S&P 500 earnings season concluded -- only four companies are expected to report holiday quarter profits this week -- markets are far more likely to focus on economic data releases, including data on Wednesday showing the number of unfilled positions in the U.S. economy over the month of January. The Job Openings and Labor Turnover Survey, known as Jolts, hit a near record high of 11.01 million in December.
Weekly jobless claims will follow on Thursday, with the week's final, and likely most decisive event, coming Friday with the release of the Labor Department's February jobs report. Early indications suggest the economy added around 200,000 new positions last month, with average hourly earnings rising 4.8% on the year -- and 0.3% from January -- with a headline unemployment reading of 3.4%.
3. -- China Reveals Muted Growth Targets At National Peoples Congress
China's National Peoples Congress lowered its GDP growth target for the second consecutive year Sunday, indicating its post-pandemic recovery may take longer to materialize.
Premier Li Keqiang set a growth target for the world's second-largest economy of 'around 5%' in his annual in the Government Work Report, firmly shy of analysts' estimates and one of the weakest in decades. Li, who is set to retire this year in a major shake-up of the NPC that will see it become even more enthralled to the President Xi Xinping, also set a 3% CPI inflation target, vowed to create 12 million new jobs and keep China's government deficit at around 3% of GDP.
"Overall, the government realises the strength and weaknesses faced by the economy," said ING's China economist Iris Pang. "It is not overly optimistic and does not spend too much to boost growth. It focuses more on longer-term growth challenges."
4. -- Tesla Unveils Latest Round of U.S. EV Price Cuts
Tesla (TSLA) shares edged higher in pre-market trading after the carmaker unveiled new price cuts for its US models, its fifth price adjustment of the year.
Tesla, which posted stronger-than-expected fourth quarter earnings in late January and said demand continues to outpace both domestic and international production, lowered the cost of its Model X and Model X Plaid by around 9%, and the cost of its Model S AWD by around 5%.
Elon Musk stressed the importance of vehicle prices during Tesla's investor day presentation in Austin last week, declaring that "the desire for people to own a Tesla is extremely high ... the limiting factor is their ability to pay for a Tesla".
Tesla shares were marked 0.41% higher in pre-market trading to indicate an opening bell price of $198.60 each.
5. -- Creed III Delivers Weekend Box Office Knockout
The latest installment of the Rocky movie franchise scored a box office knockout this weekend with nearly $60 million in North American receipts in one of the strongest-ever openings for a sports-related film.
Creed III, developed through a partnership between tech giant Amazon (AMZN) and the venerable Hollywood studio Metro-Goldwyn-Mayer and staring Michael B. Jordan in the eponymous role, took in around $58.7 million in box office revenues from the U.S. and Canada, according to Comscore data, well ahead of analysts' forecasts.
A further $41.8 million was earned in overseas markets, according to its international distributor, Warner Bros. Discovery (WBD).
"This is beyond all of our expectations," said MGM's head of distribution Erik Lomis. "We knew that we had something special ... we tested the movie and it tested great, but the public responded so resoundingly to it."
