Five things you need to know before the market opens on Thursday June 8.
1. -- Stock Futures Mixed, Treasury Yields Rise Amid Rate Bet Reset
U.S. equity futures were mixed Thursday, while the dollar gave back gains against its global peers and Treasury yields rose, as investors begin to re-price interest rate risks heading into next week's Federal Reserve policy meeting.
Surprise rate hikes from both the Reserve Bank of Australia and the Bank of Canada this week, both of which included hawkish inflation commentary from policymakers, has investors re-thinking the Fed's summer rate hike plans amid a resilient job market and elevated price pressures.
Fed signaling has suggested the central bank will pause its rate hike cycle at next week's meeting in Washington, but futures traders are now pricing in a 66% change it will resume increases when it meets again in July with either a 25 basis point or 50 basis point move to the upside.
The Treasury's planned issuance wave, which is likely to bring as much as $1 billion in new supply as it rebuilds its general account Fed -- run down as part of its extraordinary measures during the debt ceiling crisis -- is also pushing bond yields higher and keeping broader equity market gains in check.
Benchmark 10-year note yields breached 3.8% in overnight trading, a key threshold that could suggest a sustained move towards 4%, while 2-year paper edged 3 basis point higher to 4.557%.
Yields were higher in Europe, as well, with benchmark 2-year German bunds, known as schatz, rising to 3% for the first time since mid-March.
The U.S. dollar index, however, was modestly lower against a basket of its global peers in overnight dealing, falling 0.27% to 103.818.
On Wall Street, stocks are looking to a muted session after failing to sustain a move past 4,300 points for the S&P 500 yesterday, even as the benchmark consolidated its rally into bull market territory after rising 20% from its recent October lows.
At the same time, however, both the CBOE Group's VIX index, a key market volatility gauge, is holding at three year lows of around 14% while the concentration of the benchmark's top ten stocks hit an all-time high of 30.4% yesterday, suggesting limited breadth in the overall rally.
Heading into the start of the trading day, futures contracts tied to the S&P 500 are indicating a 1 point opening bell gain while those linked to the Dow Jones Industrial Average were priced for a 5 point move to the downside. The tech-focused Nasdaq is set to open around 4 points higher.
European stocks were moving lower in the early session, with the Stoxx 600 falling 0.12% in Frankfurt following data showing a downward revision to the region's first quarter GDP, which shrank by 0.1%. Britain's FTSE 100 was marked 0.3% lower in London.
Overnight in Asia, the region-wide MSCI ex-Japan index fell 0.511% into the close of trading, while the Nikkei 225 0.85% for its second consecutive session decline and closed at 31,641.27 points.
2. -- Weekly Jobless Claims Data In Focus As Labor Market Defies Gloom
Jobless claims data is likely to command the market's attention Thursday in a week bereft of big economic data releases as economist continue to interpret the surprisingly resilient labor market.
Around 235,000 people filed for new unemployment benefits last week, according to Street forecasts for today's weekly jobless claims release. That's a modest uptick from last week's tally but nowhere near the level that would match the pace of layoffs indicated from Challenger data, which have averaged around 75,000 a month so far this year.
Seasonal tweaks in the data, including the timing of the July 4 holiday and the annual, but temporary, layoffs from automakers re-setting their factory processes, likely means weekly figures will be an unreliable benchmark for the labor market through the summer months.
Last week's May employment report from the Labor Department's Bureau of Labor Statistics showed 339,000 new jobs were created last month, the strongest rate since January and well ahead of the Wall Street consensus forecast of a 185,000 gain.
The BLS noted that hourly wages were up 0.3% on the month - dipping below the 0.5% gains recorded over March and April the Wall Street consensus forecast of 0.4%.
3. -- GameStop Shares Plunge As CEO Ousted Following Sales Slump
GameStop (GME) shares plunged lower in pre-market trading after the video game and electronics retailer ousted its CEO following a wider-than-expected first quarter loss and slumping overall sales.
GameStop said Matt Furlong, who joined GameStop only two years ago, will be replaced by billionaire investor and group chairman Ryan Cohen.
The group said it would not be holding a conference call with investors to discuss its first quarter earnings, but said it would explore further "strategic options", including further store closings and the exit of unprofitable businesses, over the coming months.
The group posted a wider-than-expected loss of 14 cents per share for the three months ending in April, with sales falling for a fourth consecutive quarter to $1.24 billion.
GameStop shares were marked 18.7% lower in pre-market trading to indicate an opening bell price of $21.22 each.
4. -- Meta Shares Slip As EU Cracks Down On Child Protection Rules
Meta Platforms META shares moved lower in pre-market trading following reports that the social media giant will face action from European Commissioner Thierry Breton over its failure to meet online child protection standards.
Breton, the EU's Internal Markets commissioner, will meet with CEO Mark Zuckerberg later this month at the group's headquarters in Menlo Park, California, as the region looks to crack down harder on social media companies that allow sexual content that targets young children.
"Mark Zuckerberg must now explain and take immediate action," Breton Tweeted Thursday. "I will discuss with him at Meta’s HQ in Menlo Park on 23 June." He added that Meta could face "heavy sanctions" if it fails to bring its content rules in-line with Europe's Digital Services Act.
Meta shares were marked 0.6% lower in pre-market trading to indicate an opening bell price of $262.02 each.
5. -- New York City Braces For More Canadian Wildfire Smoke
President Joe Biden has offered further U.S. support to the Canadian government as it battles scores of raging forest fires that have brought damaging levels of smoke to several major American cities over the past few days.
Biden, who has spoken directly with Canada's Prime Minister Justin Trudeau, has directed officials to add to the 600 firefighters now working north of the border to assist in controlling the various outbreaks in what is now the country's worst-ever wildfire season.
New York City, meanwhile, will continue to curtail some official activities Thursday as the National Weather Service said wildfire smoke "moving southward out of Canada and over the northern part of the country has triggered Air Quality Alerts over parts of the Great Lakes/Ohio Valley to the Northeast and Mid-Atlantic."
New York's air quality rate was deemed the worst on the planet yesterday as the city's skies turned orange and haze hung over the five boroughs for hours, forcing the cancellation of schools, outdoor events and a Major League Baseball game between the New York Yankees and the Chicago White Sox
