The real action was occurring over in the oil market, where the price of WTI crude oil has fallen 5% to around $108 a barrel. That’s still above the $89 level it sat at in February just before it became imminent that Russia would invade Ukraine, but below the $130 multiyear peak hit in early March. Weighing on the price of oil, for the moment, is a Covid-19 wave in China that has prompted new lockdown measures in Shanghai, the largest city and financial centre, tamping down demand for crude.
Lower oil was benefiting airline stocks the most. Fuel costs are a high portion of airlines’ operating expenses, so a lower price of oil boosts profitability. The U.S. Global Jet Exchange-Traded Fund (ticker: JETS) gained 1.3%.
But looking ahead for the broader market, this week will be an important one for markets as they try to assess the state of the economy.
The biggest release comes Friday, when the Bureau of Labor Statistics publishes the March jobs report. Economists are looking for 460,000 jobs to have been added, a decline from February’s result of 678,000. But the expected March number isn’t anything to scoff at—and a strong labour market will only embolden the Federal Reserve to lift interest rates by half a percentage point, rather than a quarter point, in May to fight high inflation.
“A strong report (and especially low unemployment) will pressure the Fed to hike 50 bps in May and perhaps June,” wrote Tom Essayer, founder of Sevens Report Research.
That type of aggressiveness from the Fed is well understood by markets at this point. Earlier this month, the central bank laid out plans to hike rates seven times this year and more next year, and Fed governors have been talking up the possibility of even more in recent days.
Elsewhere, markets will get a sense this week of how much consumers are spending. Nominal consumer spending, which accounts for prices paid by consumers, hits the wires Thursday. Economists expect spending to have gained 0.7% month-over-month for February, versus a 2.1% increase in January.
Overseas, the pan-European Stoxx 600 rose 0.9% and the Shanghai Composite ended less than 0.1% higher, paring earlier losses.
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Oil Prices Fall as Lockdown Triggers Demand Fears
In the digital asset space, Bitcoin and other cryptocurrencies continued their price momentum from late last week with a firm rally on Monday. The price of Bitcoin, the largest crypto, popped up around 6% to near $47,000, having traded just above $40,000 last week.
Here are seven stocks on the move Monday:
Apple (AAPL) fell 1.3% following a Nikkei Asia report that said Apple plans to make about 20% fewer iPhone SEs next quarter. Shares in the tech giant’s suppliers also fell, with Qorvo (QRVO) down 2.7% and Qualcomm (QCOM) 0.7% lower.
Shares in cigarette makers Philip Morris (PM) and Altria (MO) were flat and down 1.6%, respectively, as Walmart (WMT) plans to end cigarette sales in some U.S. stores, The Wall Street Journal reported, citing people familiar with the matter.
Tesla (TSLA) gained 6.1% after it would take steps to allow it to split its stock.
Deere & Co. (DE) stock gained 0.8% after getting upgraded to Neutral from Underweight at JPMorgan.
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