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Coffee With Greta: Rising Unemployment Hits Yields


DJIA Futures: +5 (+0.01%)

SPX Futures: +11 (+0.2%)

NASDAQ Futures: +29 (+0.2%)

Good morning friends!

Futures are higher following the jobs report. 

Let’s get right to it!

Unemployment Rises

The U.S. economy added more jobs than expected in February while the unemployment rate rose unexpectedly. 

The Labor Department reported employers added 275,000 workers last month vs 198,000 expected. 

The unemployment rate rose to 3.9% vs expectations for it to be unchanged at 3.7%.

It was the highest unemployment rate since January 2022. 

That increase in unemployment came even as the labor force participation rate held steady at 62.5%.

The change in the unemployment rate appeared partly due to lower revisions in the previous two months. 

January’s job growth was revised lower by 124,000 to +229,000 while December was revised down by 43,000 to +290,000. 

Wages rose 0.1% monthly in February, below 0.2% expected, and were up 4.3% year over year vs 4.5% expected. 

The healthcare sector saw the strongest growth last month adding 67,000 jobs, government added 52,000, restaurants and bars added 42,000, social assistance rose by 24,000, transportation and warehousing added 20,000, construction added 23,000, and retail trade added 19,000.

Yields Fall After Jobs Report

Treasury yields are lower this morning following that unexpected uptick in the unemployment rate. 

The 10-year yield is down two basis points at 4.07% while the 2-year yield is down eight basis points at 4.44%.

The rising unemployment rate is a good sign for those hoping for a Fed rate cut sooner rather than later. 

CME Group’s FedWatch Tool currently shows the market betting on the first cut at the bank’s June meeting. 

Costco Slips After Revenue Miss

Costco (COST) shares are down 3.4% ahead of the open after reporting mixed Q4 results. 

Here’s how the big box retailer’s results compared to analysts’ estimates: 

  • EPS: $3.92 vs $3.63 expected
  • Revenue: $58.4 billion vs $59.1 billion 

Revenue was up 5% year over year while same-store sales rose 5.6%  vs 5% expected. 

E-commerce sales rose more than 18% from a year ago. 

In Case You Missed It

  • Rivian (RIVN) shares surged 13.4% on Thursday after the company unveiled three new EV models and announced new cost savings efforts. The electric automaker’s CEO announced the upcoming R2 SUV and two new crossovers, the R3 and R3X during a livestreamed event. Rivian said it will pause construction on its new plant in Georgia and shift production of the new R2 from that location to its existing plant in Illinois. The move is expected to save the company $2.25 billion.

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