[New York Stock Market] Rises Ahead of Good Friday Holiday... Nasdaq Up 0.76%

The three major indices of the U.S. New York stock market closed higher on the 6th (local time), the day before the Good Friday holiday and the release of the employment report.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 2.57 points (0.01%) from the previous session to close at 33,485.29. The S&P 500, which focuses on large-cap stocks, closed up 14.64 points (0.36%) at 4,105.02, and the tech-heavy Nasdaq rose 91.10 points (0.76%) to finish at 12,087.96.

Within the S&P 500, eight sectors including communication, technology, real estate, and utilities rose, while three sectors including energy, industrials, and materials declined. By individual stocks, Costco fell 2.24% after announcing that its same-store sales in March declined for the first time in three years. Among major tech stocks, Alphabet (Google) rose 3.78%, Microsoft increased 2.55%, and Apple gained 0.55%. Leading energy stocks such as ExxonMobil and Chevron declined by more than 1%.

[Image source=Reuters Yonhap News]

Investors monitored indicators released on the day, such as layoffs and unemployment claims, ahead of the weekend holiday that includes Good Friday and Easter. A cautious tone was evident as overall trading volume decreased ahead of the holiday.

According to Challenger, Gray & Christmas (CG&C), U.S. companies' layoff plans for March totaled 89,703, a 15% increase from the previous month. Compared to a year ago, this figure surged more than 300%. The total layoffs in the first quarter reached 270,416, the highest since the third quarter of 2020. Notably, over 100,000 layoffs occurred in the technology sector alone. On the same day, weekly initial unemployment claims fell compared to the previous week due to changes in statistical methods but exceeded market expectations. According to the U.S. Department of Labor, last week's initial unemployment claims totaled 228,000.

Investors' attention is focused on the March employment report to be released on the 7th. Currently, Wall Street estimates that nonfarm payrolls for March will be around 240,000, reflecting a potential decrease from February's 311,000. Signals of labor market slowdown have been repeatedly confirmed in reports released earlier this week, including March private sector employment and the February Job Openings and Labor Turnover Survey (JOLTs). The market is analyzing that concerns about a recession and the tightening effects of the Federal Reserve (Fed) are becoming evident. The New York stock market will be closed on the 7th for Good Friday, but the bond market will open in the morning.

Chris Zaccarelli, CIO of Independent Advisor Alliance, commented on the unemployment data released that day, saying, "It reinforces the idea that the Fed's rate hikes are cooling the labor market and slowing the economy," adding, "The probability of a recession, even a significant one, is higher than most people think." Jamie Cox, managing partner at Harris Financial Group, described the mood as, "The Fed has built a wall with interest rates, and the economy is rushing toward that wall."

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), stated during a discussion held in Washington DC ahead of the IMF and World Bank (WB) Spring Meetings, "The IMF projects the global economic growth rate to remain around 3% over the next five years," adding, "This is the lowest medium-term growth forecast since 1990." She noted that risks such as those in the financial sector have increased downside pressure on the economy. Prior to COVID-19, the global economy grew at an average annual rate of 3.8%. The IMF is scheduled to release an updated World Economic Outlook (WEO) report on the 11th.

The market is awaiting the employment report to be released the next day, with divided expectations between a rate hold and a baby step (0.25 percentage point rate hike) in May. According to the Chicago Mercantile Exchange (CME) FedWatch tool, as of the afternoon of this day, the federal funds futures market reflects a 50.3% probability that the Fed will hold rates steady at the May FOMC meeting. The probability of a 0.25 percentage point rate hike is 49.7%. On this day, James Bullard, president of the Federal Reserve Bank of St. Louis and a prominent hawk within the Fed, stated that "inflationary pressures will not disappear quickly."

In the New York bond market, Treasury yields rose. The 10-year U.S. Treasury yield hovered around 3.30%, and the 2-year yield was near 3.83%.

Oil prices moved similarly to the previous session. At the New York Mercantile Exchange, May delivery West Texas Intermediate (WTI) crude oil prices traded at $80.70 per barrel, up $0.90 (0.11%) from the previous close.