Here are the most important news, trends and analysis that investors need to start their trading day:
- Wall Street set to wrap up strong month but weak quarter
- Oil sinks after slight OPEC+ output hike, reports of U.S. crude release
- Yield spreads remain tight after hot inflation, moderate jobs data
- Ukraine's president asks for more help to fend off Russia
- Covid asylum limits may end; Biden urges passage of vaccine funds
1. Wall Street set to wrap up strong month but weak quarter
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U.S. stock futures were little changed Thursday as bond yields and oil prices dropped. Major international oil producers in OPEC+ stuck to a modest crude oil output hike after their meeting amid reports the U.S. was considering releasing supply from its strategic oil reserves. On Wednesday, the Dow Jones Industrial Average and the S&P 500 broke four-session winning streaks and the Nasdaq dropped for the first time in three days. With one day left in March, all three stock benchmarks were solidly higher for the month. However, as the wild first quarter comes to an end, Wall Street was tracking for a rough first three months of 2022.
- Dow stock Apple rose in the premarket, the morning after seeing its 11-session 18% winning streak come to an end. Walgreens Boots Alliance, also a Dow component, fell 1% in Thursday's premarket, shortly after reporting better-than expected earnings and revenue. Results were helped by increased demand for Covid booster shots and tests due to the spread of the omicron variant during the winter months.
2. Oil sinks after slight OPEC+ output hike, reports of U.S. crude release
West Texas Intermediate crude, the U.S. oil benchmark, fell 6% to around $101 per barrel Thursday even after OPEC+ agreed to raise output targets by 432,000 barrels per day. Energy analysts had widely expected the group to rubber-stamp another modest increase. Meanwhile, President Joe Biden is set to give remarks Thursday, with media reports saying he'll detail plans to release 1 million barrels of oil per day for several months from America's Strategic Petroleum Reserve.
- The move would be aimed at easing oil and gas prices that have surged on Russia's invasion of Ukraine and subsequent supply concerns, driving spikes in inflation across the global economy. Russia is a major oil exporter — and unprecedented sanctions for its unprovoked war have disrupted flows.
3. Yield spreads remain tight after hot inflation, moderate jobs data
Treasury yields fell Thursday, but key spreads — the 5-year and 30-year as well as the 2-year and 10-year — remained tight. The 5-year Treasury yield inverted earlier this week and went above the 30-year yield, a market distortion that's often happened before economic recessions. The benchmark 10-year Treasury yield dropped to 2.3%, backing away from near three-year highs.
- The Federal Reserve's favorite inflation gauge, the core personal consumption expenditures price index, advanced 5.4% on a year-over-year basis in February, a bit lower than estimates but up from the prior month's biggest increase since spring of 1983. Markets expect the central bank to get more aggressive with interest rate hikes to fight inflation after increasing borrowing costs earlier this month for the first time in more than three years.
- One day before the March employment report, the government said Thursday morning that initial jobless claims for the week ended March 26 rose to 202,000. The prior week's reading was revised slightly higher to 188,000, still around a 52-year low.
4. Ukraine's president asks for more help to fend off Russia
Ukrainian President Volodymyr Zelenskyy said his nation's stiff defense against Russia's invasion was at a "turning point," and he again appealed to the U.S. for more help. Cease-fire talks, which took place face to face this week and sparked hope, are set to resume by video Friday. Russia has been playing down indications of progress and it appears to have gone back on its pledge to scale back some operations.
Newly declassified U.S. intelligence indicates Russian President Vladimir Putin feels he was misled by military leaders who did not tell him key details about the botched invasion of Ukraine because they feared angering him, top Biden administration officials said Wednesday. This communications failure has "resulted in persistent tension between Putin and his military leadership," White House communications director Kate Bedingfield told reporters.
5. Covid asylum limits may end; Biden urges passage of vaccine funds
The Biden administration is expected to end by May 23 the asylum limits at the U.S.-Mexico border that were put in place to prevent the spread of Covid, according to The Associated Press, citing people familiar with the matter. The decision, which isn't final yet, would halt use of public health powers to absolve the U.S. of obligations under American law and international treaty to provide haven to people fleeing persecution.
Biden warned the U.S. will not have enough Covid vaccine doses this fall to ensure free and easy access for all Americans if Congress fails to pass the $22.5 billion in additional funding the administration has requested. Biden also said Wednesday the U.S. has enough supply to ensure people eligible for fourth shots have access to them after the Centers for Disease Control and Prevention this week recommended another round of boosters.
— CNBC reporters Melissa Repko, Elliot Smith, Sam Meredith, Christina Wilkie and Spencer Kimball as well as The Associated Press and Reuters contributed to this report.
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