Investing.com - The sale of American bonds was reflected in world markets, but Wall Street seems to be moderately restored at the opening. It is expected that the number of vacancies outside the sphere of agriculture will increase dramatically from January. OPEC solution does not increase production causes rise to oil prices, and analysts increase their forecasts. China put the goal of GDP growth this year lower than many expected. That's what you need to know about the stock market on Friday, March 5th.
1. Powell comments influenced world markets
The sale of American bonds, provoked by comments by the head of the Federal Reserve System of Jerome Powell during his speech on Thursday, was reflected in world markets, although the European market was restored after a weak discovery.
Powell repeated again that the Fed will not hurry with tightening its monetary policy until significant progress has been made in reducing unemployment. His comments led to the fact that the yield of 10-year treasury bonds amounted to 1.55%, and 30-year-olds - 2.35%. Later both indicators decreased, but the growth rates represent an obvious danger to the trend of refinancing mortgage loans. Rates for 30 years of mortgage loans on Thursday exceeded 3%.
Powell indicated that the Fed will not respond to an increase in profitability until the market remains "ordered".
2. China set a low growth target
China has announced a new growth goal in 2021, which is clearly lower than many expectations.
At the annual All-China Assembly of People's Representatives, which establishes economic priorities for the year, Premier Lee Chanitsan marked the goal of GDP growth of 6%. This is comparable with the forecast of the International Monetary Fund - 7.9%, made in the last review of the global economy.
These figures suggest that Beijing wants to cancel some of the powerful stimulating measures introduced by him last year, taking into account the sharp increase in public and private debt over the past 12 months. The highest banking supervision body has been warned by "bubbles" last week in various markets, including in the domestic real estate market.
Prices for non-ferrous metals, sharply fallen on Thursday, are restored.
3. The US stock market will also restore
The US stock market will open by moderate growth after new losses on Thursday, but traders fear too strong pressure at the opening: the general picture this week was such that bright debuts almost immediately encountered large sales.
By 06:40 in the morning East time (11:40, Greenwich), Dow Jones futures increased by 81 points, or 0.3%, and S & P 500 futures - by 0.2%. Futures on the NASDAQ 100, which had the main burden of sales this week, and completed the session on Thursday at the lowest level for almost three months, rose 0.1%.
Shares that are likely to be in the spotlight - Broadcom (NASDAQ: AVGO), Costco Wholesale (NASDAQ: COST) and GAP (NYSE: GPS): After closing the market on Thursday, they showed quarterly income results, exceeded expectations.
4. Growth in the labor market will again increase
The volume of trading in the stock market and bonds is likely to be moderate, at least until 08:30 in the morning (13:30 GRINVICH), when a monthly report on the labor market will be published.
Analysts expect that 182 thousand new vacancies increased in the US economy over the monthly period until mid-February, which will become the second monthly improvement in the sphere of hiring. However, analysts will also follow what happens to the index of economic activity, which in January fell to the lowest level since June, since frustrated workers stopped looking for work.
These figures will come out the day after the report on a small increase in the weekly applications for unemployment benefits on Thursday, which, nevertheless, disguised the reduction of 1 million people of the total number of those who submitted applications for unemployment benefits.
Also published data on the US Trade Balance for February will also be published.
5. Oil prices continue to grow after OPEC surprise +
The prices of crude oil jumped to the highest level from January 2020, when analysts hurried to update their price forecasts after an unexpected decision of OPEC and its allies to preserve production in April almost unchanged. Many expected an increase of 1.5 million barrels per day or more.
This solution means that the reduction of global oil reserves is likely to accelerate if the northern hemisphere economy will continue to open after the winter burst of COVID-19. Citigroup (NYSE: C) expects now that by the end of the month the price of Brent will reach $ 70 per barrel, while Goldman Sachs analysts (NYSE: GS) (NYSE: GS) expect that in the third quarter of this year it will be $ 80.
This news also supported the high demand for the shares of oil and gas companies: the shares of some European companies and oil-based companies reached a 13-month maximum in the morning trading in Europe.
This solution will add some piquancy to the data on the calculation of baker hughes (NYSE: BKR), which will come out a little later, considering that OPEC decision implies that the mining of shale oil in the United States will not come to life in the near future.
Author Jeffrey Smith
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