Five things you need to know before the market opens on Thursday March 30:
1. -- Stock Futures Extend Gains On Fading Bank Crisis Concerns
U.S. equity futures extended recent gains Thursday, with tech stocks consolidating a move into 'bull market' territory and volatility sliding to a three-week low, as investors look to exit the recent turmoil triggered by worries in the banking sector.
The S&P 500 closed above its 50-day moving average, a key indicator for market technicians, for the first time since the collapse of Silicon Valley Bank on March 10 last last as improving corporate outlooks and broader market sentiment lifted risk assets across the board.
The Federal Reserve's vice chair for supervision, Michael Barr, spent two days in Congressional hearings insisting to lawmakers that SVB Financial's failure was a result of management errors and not indicative of broader stresses in the banking sector, a view that appears to be finding increasing acceptance in global financial markets.
The MSCI World index, the broadest measure of global shares, is on pace for a near 5% gain for the first quarter, while the Nasdaq 100 closed at 12,846.03 points last night, marking a 20% rebound from its late December lows and placing the U.S. tech benchmark in bull market territory.
The equity market's prime volatility gauge, the CBOE Group's VIX index, is also indicating signs of calm, falling another 4.8% in overnight trading to a near one-month low of 19.02 points.
In other markets, benchmark 2-year note yields were creeping higher again Thursday, and could blunt early stock market gains, as traders look to Friday's release of the Fed's preferred inflation gauge, the PCE Price Index.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.23% lower in overnight dealing at 102.398, a move that suggests broader market optimism, while 2-year note yields were pegged at 4.082%.
On Wall Street, stocks are set for another firm open ahead of weekly jobless claims data and a third estimate of fourth quarter GDP growth at 8:30 am Eastern time.
Futures contracts tied to the S&P 500 indicate an 18 point opening bell gain while those linked to the Dow Jones Industrial Average suggest a 150 point move to the upside. Futures tied to the Nasdaq are indicating a 50 point advance amid the nudge higher in Treasury bond yields.
Overnight in Asia, the region-wide MSCI ex-Japan index was marked 0.56% higher into the close of trading, while Japan's Nikkei 225 slipped 0.13.% in Tokyo.
In Europe, the Stoxx 600 was marked 1% higher in early Frankfurt hours, and trading at a two-week high, while the FTSE 100 was marked 0.65% higher in London.
2. -- FDIC Looking At Higher Fees For Big Banks
The Federal Deposit Insurance Corporation is mulling plans to increase the fees paid by larger banks in order to shore up its bank rescue fund following the $23 billion hit to cover deposits at Silicon Valley Bank and Signature Bank.
Bloomberg reported Thursday that the FDIC, which pegged its overall fund at $128 billion at the end of last year, is looking to ease the burden on local and community lenders -- which are striving to maintain deposits following record outflows in the wake of the Silicon Valley Bank collapse -- while boosting the fees paid by larger lenders such as JPMorgan (JPM), Wells Fargo (WFC) and Bank of America (BAC).
“We have the discretion to tailor that assessment to the institutions that most directly benefited, (to the flight of deposits from smaller to larger lenders” FDIC chairman Martin Gruenberg told lawmakers on Capitol Hill yesterday. “We’re going to be keenly sensitive to the impact."
First Republic (FRC) shares were marked 0.21% lower in pre-market trading to indicate an opening bell price of $14.23 each, while Western Alliance Bancorporation (WAL) rose 2% to $36.79 each. PacWest Bancrop (PACW) rose 1.4% to $10.00 each.
3. -- H&M Shares Surge After Strong Quarterly Profits
Hennes & Mauritz shares surged higher in European trading Thursday after the world's second-largest closing retailer posted stronger-than-expected February quarter profits.
H&M, which has more than five hundred stores in the United States, said operating profits jumped 58% from last year to just under $70 million, with gross margins improving by 1.4% to 47.2%, even as the group continues to shed excess inventory under CEO Helena Helmersson.
Current month sales are likely to rise by around 4%, H&M said, as European activity is hit by colder weather and consumers continue to pare back spending in the face of surging inflation.
"The start of the year shows that we have taken further steps towards the goal of achieving an operating margin of 10% already next year," Helmersson said in a statement.
H&M shares were marked 15.1% higher in Stockholm trading to change hands at 141.42 Swedish crowns each.
4. -- Electronic Arts Shedding 6% of Staff As Tech Job Cuts Accelerate
Electronic Arts (EA) shares edged lower in pre-market trading after the video game maker said it would cut around 6% of its global workforce.
The maker of the FIFA football and NBA 2K game franchises said it would reduce its real estate and office space footprint, abandon some projects and reduce its overall headcount in a cost-cutting drive that reflects fading demand in the broader gaming market and the ongoing cull of jobs in the tech sector, which topped 63,000 over the first two months of the year, according to data from Challenger Gray.
Electronic Arts said the moves could likely incur charges of between $170 million and $200 million, with around $60 million related to severance charges.
Electronic Arts shares were marked 0.12% lower in pre-market trading to indicate an opening bell price of $119.05 each.
5. -- Major League Baseball's Opening Day Brings Historic Changes To National Pastime
Major League Baseball will begin its 2023 regular season Thursday with a full slate of 15 games, marking the first time since 1968 that Opening Day has included all 30 franchises, and big changes to the way the national pastime is played.
The New York Yankees will kick things off at 1:05 pm Eastern time with a home stand against the San Francisco Giants, while at the same time the Washington Nationals will host the Atlanta Braves.
The defending World Series champions, the Houston Astros, will begin their title defense at home against the Chicago White Sox at 7:08 pm Eastern time.
MLB is facing a number of challenges this year, including the bankruptcy of a key regional sports network -- Diamond Sports Group -- that could affect the broadcasting of games from 14 different major league teams.
Fading television ratings, alongside an effort to attract younger viewers to both televised games and the league's various stadia, has lead to host of rule changes that come in to effect this year, including clocks that will limit pitchers to 15 seconds per throw and give teams only 30 seconds between batters.
MLB says the changes, which were used during this year's Spring Training, has reduced game times by around 26 minutes.
"We've tried to address the concerns expressed in a thoughtful way, respectful -- always -- of the history and traditions of the game, and of player concerns," said MLB Commissioner Rob Manfred.
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