Here are the most important news items that investors need to start their trading day:
1. Jobs Friday is here
All eyes will be on the February jobs report, which hits at 8:30 a.m. ET. If it’s a big number, and it shows wages gaining, investors will likely grow more wary of bigger and faster Federal Reserve rate hikes, which Chairman Jerome Powell warned about earlier this week. What’s the expectation? According to Dow Jones, economists estimate that the U.S. economy added 225,000 jobs last month. While that’s well under the shocking 517,000 jobs in January, it would still be considered a robust number – making for a “good news is bad news” scenario for the bulls.
2. Another bummer week
A general view of the facade of the New York Stock Exchange on January 13, 2015 in New York City.
Ben Hider | Getty Images Entertainment | Getty Images
We’ll see what impact the jobs report has on stocks, but the S&P 500, the Nasdaq and the Dow are on pace to finish the week in the red. In fact, all three could well end up down more than 3% for the week. Equities are coming off a terrible Thursday after SVB Financial, aka Silicon Valley Bank, spooked the financial sector. (More on that below.) It looks like similar action could continue Friday, as bank stocks floundered in European markets. Follow live markets updates.
3. Trouble in the Valley
Silicon Valley Bank is in deep trouble, stoking fears of a bank run. Shares of the firm tanked 60% Thursday, and they’re down another 40%-plus in high-volume off-hours trading Friday morning. The bank has been around for four decades, providing support for tech startups even as the industry has gone through ups and downs. This time looks different, though. SVB sent investors running for the hills this week after it sold off $21 billion in holdings at a loss of about $1.8 billion. It also raised $500 million from General Atlantic, a private equity firm. Venture activity had already declined, the IPO market has largely dried up, and now the Fed’s rate hikes are putting an even bigger squeeze on the high-risk world of tech finance. Client funds are dwindling rapidly, too. “Psychologically, it’s a blow because everyone realizes how fragile things can be,” Scott Orn, operating chief at Kruze Consulting, told CNBC.
4. GM offers buyouts to thousands
US President Joe Biden, with General Motors CEO Mary Barra, looks at a Chevrolet Silverado EV as he tours the 2022 North American International Auto Show at Huntington Place Convention Center in Detroit, Michigan on September 14, 2022. – Biden is visiting the auto show to highlight electric vehicle manufacturing.
Mandel Ngan | Afp | Getty Images
General Motors isn’t done with staff reductions. The Detroit automaker said Thursday that it would offer buyouts to a majority of its 58,000 salaried workers in the United States. The company said it would result in a $1.5 billion pretax charge. The move comes soon after GM said it laid off about 500 white-collar workers globally. The company is looking to rein in costs as it ramps up production of costly electric vehicles to adjust to rapidly changing standards in the U.S. and abroad. “Employees are strongly encouraged to consider the program,” GM said in a statement. “By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market.”
5. Gap falls into itself
Gap clearance price tags are seen at the Gap retail store on September 20, 2022 in Los Angeles, California.
Allison Dinner | Getty Images
Gap was once the American mass market avatar of hipness. These days, though, the apparel retailer is on the verge of slipping into irrelevance. Shares of Gap fell after its latest disappointing earnings report. Sales declined in the holiday quarter, while the company posted a much wider loss than Wall Street expected. It also offered soft guidance for the current quarter and the year. Gap – whose brands include Banana Republic, Athleta and Old Navy – also announced another shakeup in its executive ranks as it zeroes in on a choice for its permanent CEO. The company said an external candidate would fill the role.
– CNBC’s Patti Domm, Alex Harring, Ari Levy, Rohan Goswami, Michael Wayland and Gabrielle Fonrouge contributed to this report.
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