5 things to know before the stock market opens Friday
U.S. stock futures started the second quarter higher Friday ahead of the government’s March employment report. Wall Street on Thursday ended its worst quarter since the first three months of 2020, which included the Covid pandemic lows in late March of that year. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq all dropped about 1.5% on Thursday. For Q1, the Dow and S&P 500 closed down 4.57% and 4.95%, respectively. The Nasdaq lost 9.1%. The start of a rate-hiking cycle from the Fed, high inflation and Russia’s invasion of Ukraine have all contributed to the struggles for equities so far this year. 2. Recession signal: Key Treasury spread flips for first time since 2019 Treasury spreads could be influenced by the jobs reports Friday, one day after the 2-year yield briefly rose above the 10-year yield for the first time since 2019, an inversion that often happens before economic recessions. Some data providers showed the 2-year-10-year spread inverted for a few seconds on Tuesday, but CNBC data did not confirm it at the time. A negative number on the chart means the two yields are not inverted at this time.
In another key yield spread, which inverted Monday for the first time since 2006, the 5-year and the 30-year flipped again Friday. The short-duration yields going above the longer-dated ones signal the market concerns that the Fed might raise interest rates too quickly. A yield spread on a much shorter time horizon — the 3-month Treasury and the 2-year — has been decidedly positive.