Five things you need to know before the market opens on Monday April 3:
1. -- Stock Futures Mixed As OPEC Shocks Global Risk Sentiment
U.S. equity futures traded mixed Monday, with oil majors providing a significant boost to the Dow following a surprise weekend production cut from OPEC members that sent crude prices sharply higher and jolted global risk sentiment.
Oil surged as much as 8% in overnight Asia trading before paring some of that advance during the European session, with West Texas Intermediate crude prices briefly topping $80 a barrel in the aftermath of OPEC's shock decision.
The move also lifted Treasury bonds yields, and firmed-up the U.S. dollar, as investors looked to the inflationary aspect of richer crude prices over the summer and autumn months. That comes, ironically, after a softer-than-expected reading for the Fed's preferred inflation gauge on Friday, the PCE Price Index, for the month of February, which helped power U.S. stocks to solid end-of-quarter gains.
Benchmark 2-year Treasury note yields were marked 2 basis points higher at 4.108% in European trading while 10-year notes were pegged at 3.536%. The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.1% higher at 102.606.
The potentially inflationary bump from higher crude prices is also filtering into Fed rate forecasts, with the CME Group's FedWatch now indicating a 62% chance of another 25 basis point rate hike in May and a 59.2% chance that Chairman Jerome Powell and Co. will hold that rate in place through June.
On Wall Street, traders are moving into the holiday-shortened week cautiously, with futures tied to the S&P 500 priced for a modest 6 point opening bell decline and those linked to the tech-focused Nasdaq indicating an 80 point pullback.
Solid gains for Chevron Corp (CVX), meanwhile, look set to help the Dow to a 106 point opening bell advance.
In Europe, muted reading for manufacturing activity around the region in March, as well as the surge in crude prices, kept a lid on early gains, although the Stoxx 600 managed to rise 0.23% in early Frankfurt trading. Britain's resource-heavy FTSE 100, meanwhile, gained 0.78%.
Overnight in Asia, the region-wide MSCI ex-Japan index was marked 0.24% lower into the close of trading, while Japan's Nikkei 225 gained 0.52% on the first day of trading for its new financial year in Tokyo.
2. -- Week Ahead: Jobs Data In Focus As Fed Tracks Inflation
The Labor Department's March jobs report, expected Friday despite markets being closed for the Easter holiday, will provide a key test to the Federal Reserve's policy path as it holds the course on rate hikes despite softening inflation data and lingering concerns in the banking sector.
Analysts expect the Friday report to indicate that another 240,000 new jobs were added to the economy last month, a tally that would take the first quarter total to just over 1 million, with average hourly earnings ticking modestly higher from February at 0.3%.
In a week replete with labor market indicators, the Bureau of Labor Statistics will publish its JOLTS job openings report for the month of February on Tuesday at 10:00 am Eastern time, with ADP posting its national employment report on Wednesday at 8:15 am Eastern time. Weekly jobless claims figures are expected at 8:30 am Eastern time on Thursday.
Economists may note, however, that labor market gains prior to the collapse of Silicon Valley Bank and the closure of Signature Bank won't reflect the pressures that are likely to come from tighter credit conditions and slower lending growth over the coming months.
That could place extra emphasis on the forward-looking indicators from Monday's PMI and ISM Manufacturing sector surveys, due at 9:15 am and 10:00 am Eastern time respectively, as well as the ISM's non-manufacturing sector activity report due Wednesday at 10:00 am Eastern time.
3. -- Crude Prices Surge As OPEC Unveils Surprise Production Cuts
Global oil prices surged higher Monday following a surprise move by OPEC members late Sunday to add more than a million barrels per day to the cartel's existing production cuts.
In a move that pre-empts a meeting of OPEC members, as well as non-member allies such as Russia, slated for this week, nine members of the group unveiled plans to cut a further 1.66 million barrels of oil from its total daily output. The decision means OPEC+, which includes Russia, is taking nearly 3.4 million barrels of crude from the market each day, a level that's equivalent to around 3.7% of daily global demand.
US production growth is slowing leaving more power in the hands of OPEC hence the much more proactive stance seen in recent months," Saxo Bank strategists wrote. "They may see a slower than expected pickup in demand from China and ultimately managing to squeeze short sellers out of the market in the process was probably a bonus in their view."
WTI crude futures for May delivery, which are tightly-linked to U.S. gasoline prices, were marked $4.24 higher from Friday's closing levels in overnight trading at $79.91 per barrel. Brent contracts of June delivery, the global pricing benchmark, surged $4.38 to $84.27 per barrel.
4. -- Tesla Slides After Modesty Softer Q1 Delivery Figures
Tesla (TSLA) shares moved lower in pre-market trading after the carmaker posted record first quarter deliveries but noted that production is outpacing demand despite steep price cuts put in place earlier this year.
Tesla delivered a record 422,875 new cars over the three months ending in March, the company said in a statement, up 36.4% from last year and 4.3% north of the 405,278 tally reached over the three months ending in December.
Analysts forecast for deliveries ranged from between 420,000 to around 440,000, with with Refinitv pegging the March quarter target at 430,000. Production rose 44.5% to 440,808 vehicles as supply chain disruptions and Covid-related closures at its Shanghai factory faded.
The group will publish its first quarter earnings on April 19, after the market closes.
Tesla shares were marked 2.05% lower in pre-market trading to indicate an opening bell price of $203.20 each.
5. -- WWE, Vince McMahon, Nearing $9 Billion Deal With Endeavor Group
World Wrestling Entertainment (WWE) shares slipped lower in pre-market trading amid reports that the scripted sports media group is nearing a $9 billion takeover by UFC owners Endeavor Group Holdings.
Multiple media reports suggest the deal would see Endeavor, which is controlled by Hollywood insider Ari Emanuel, owning 51% of the combined group, with WWE and its founder, Vince McMahon, retaining a 49% stake.
McMahon, 77, announced his plan to return to the group in January to lead media rights negotiations following his resignation as CEO over the summer amid allegations he had paid $3 million to a former group paralegal with whom he was having a consensual affair.
WWE shares were marked 2.8% lower in pre-market trading to indicate an opening bell price of $88.70 each.
