Coffee With Greta: Jobs Report Crushes Expectations
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DJIA Futures: -215 (-0.6%)
SPX Futures: -25 (-0.6%)
NASDAQ Futures: -69 (-0.5%)
Good morning friends!
Futures are lower as the market digests new jobs data and the ongoing war in Ukraine.
Let’s get right to it!
Job Growth Surges in February
The February jobs report crushed expectations.
The Labor Department reported the U.S. economy added 678,000 jobs last month with the unemployment rate falling to 3.8%.
That was better than economists’ expectations for 440,000 jobs and an unemployment rate of 3.9%.
The leisure and hospitality sector saw the strongest job growth in February, adding 179,000 workers.
The total number of unemployed people in the U.S. fell to 6.3 million vs 5.7 million pre-pandemic.
The labor force participation rate rose slightly to 62.3%, still lagging behind the 63.4% before Covid.
Wage growth stalled in February, up 5.1% year-over-year vs 5.7% annual growth in January.
The report also included revisions for January and December.
Job growth in December was revised up by 78,000 to 588,000 while January’s data was revised higher by 14,000 to 481,000.
Oil Prices Resume Rally
Oil prices are back on the rise today after dipping on Thursday.
West Texas Intermediate crude futures for April rose back above $112 per barrel this morning while Brent crude futures for May topped $114 per barrel.
Oil prices cooled Thursday following reports a revised Iran nuclear deal is close to complete.
That agreement would allow Iran to sell more oil globally, which could relieve supply shortages caused by Russia.
No formal sanctions have been imposed against Russian oil but analysts say the market is “self sanctioning”.
With major oil companies refusing to buy Russian crude, demand has surged for both WTI crude and Brent crude.
JPMorgan analysts say the avoidance of Russian oil could cause Brent crude prices to hit $185 per barrel by the end of this year.
Wheat futures continued to surge today, with trading halted at $12.09 per bushel after hitting limit-up for the fourth day in a row.
Corn futures are up about 3.7% at over 775¢ per bushel.
Russia Attacks Europe’s Largest Nuclear Power Plant
The EU’s top diplomat says “everything is on the table” when it comes to Russian sanctions.
That includes energy sanctions after Russia attacked the largest nuclear power plant in Europe, which is located in Ukraine.
A fire was extinguished at the Zaporizhzhia nuclear power plant and officials say there does not appear to be elevated radiation in the area.
But the International Atomic Energy Agency says only one reactor is working at 60% capacity.
The U.S. imposed a new round of sanctions on Russian oligarchs and their families Thursday.
The actions include “full blocking sanctions” on at least eight “elites” and visa restrictions on 19 Russian oligarchs and 47 of their family members and close associates.
One of those targeted includes Russian President Vladimir Putin’s Press Secretary, Dmitry Peskov.
JPMorgan analysts say economic sanctions will hurt Russia’s economy severely this year.
The group now expects Russia’s GDP to contract 35% in Q2 and 7% for the full year.
Gap Surges on Earnings Guidance
Gap (GPS) shares are rallying 7.7% ahead of the open after issuing strong profit guidance.
The retailer reported a Q4 loss of $0.02 per share on $4.53 billion in revenue.
That was better than analysts’ expectations for a loss of $0.14 per share on $4.49 billion in revenue.
Gap’s sales were still down 3% compared to 2019.
The company forecast full-year adjusted earnings between $1.85 and $2.05 per share vs analysts’ expectations for $1.86.
Strong Q4 Sales Boost Sweetgreen
Sweetgreen (SG) shares are surging 18.7% in premarket trade after reporting earnings for the first time since its IPO in November.
The salad chain reported a Q4 loss of $1.14 per share on $96.4 million in revenue. That was an improvement from the $2.49 per share loss in Q4 2020 and topped analysts’ expectations for $84.7 million in revenue.
Sweetgreen forecast revenue between $100 million and $102 million this quarter and full-year revenue between $515 million and $535 million.
Analysts were looking for 2022 revenue guidance of $513.1 million.
In Case You Missed It
- Fed Chair Jerome Powell confirmed to Congress the bank will move forward with rate hikes in March. In two-days of testimony, Powell said the impact of the Ukraine war on the U.S. economy remains “uncertain”. But the Central Bank remains focused on inflation with a 0.25% rate hike expected later this month. Powell left the door open for larger rate hikes later this year if inflation remains more persistent than expected.