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5 things to know before the stock market opens March 5, 2021

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Here are the most important news, trends and analysis that investors need to start their trading day:

1. Dow set to rebound after Thursday’s steep sell-off

Traders on the floor of the New York Stock Exchange.

Source: NYSE

Dow futures bounced Friday ahead of the government’s latest employment report and after a sharp decline on Wall Street. Federal Reserve Chairman Jerome Powell on Thursday failed to reassure investors that the central bank would keep surging bond yields and inflation in check. The Dow closed 345 points, or 1.1%, lower Thursday, in a wild session that saw the 30-stock average down more than twice that at one stage. The S&P 500 fell 1.3%. The Nasdaq was the big loser on the day, sinking more than 2%, and closing nearly 10% off its Feb. 12 record high. The index also went negative on the year. As of Thursday’s close, the Dow and S&P 500 held onto slim 2021 gains.

2. Employers likely added more jobs in February

The Labor Department is set to issue its February employment report at 8:30 a.m. ET. Economists expect that 210,000 nonfarm payrolls were added last month compared with just 49,000 in January. The nation’s unemployment rate in February is seen holding steady at 6.3%, though in coming months that level is likely to keep dropping as more of the public gets vaccinated against Covid-19 and service sector jobs return.

3. 10-year Treasury yield holds above 1.5% before jobs report and after Powell

Federal Reserve Chair Jerome Powell speaks during a Senate Banking Committee hearing on Capitol Hill, Washington, December 1, 2020.

Al Drago | Pool | Reuters

The 10-year Treasury yield moved higher Friday, trading around 1.56%, pushing toward last week’s one-year high. Yields have increased rapidly since the end of January, stoking inflation fears. Powell did little to allay those concerns, acknowledging he sees some inflationary pressures ahead. However, he also said that rising prices won’t likely be enough to spur the Fed to hike interest rates. The market had been looking for Powell to address the recent surge in bond yields more directly, with a possible nod toward adjusting the Fed’s asset purchase program.

4. Senate nears Covid relief bill votes after GOP delay

Members of the National Guard gather outside the U.S. Capitol in Washington, D.C., U.S., on Thursday, March 4, 2021.

Stefani Reynolds | Bloomberg | Getty Images

Debate in the Senate on Democrats’ $1.9 trillion coronavirus relief package is set to continue as lawmakers try to beat a deadline to prevent a federal unemployment aid boost from expiring. The Senate voted Thursday to start debate on the rescue package, setting the stage for its approval as soon as this weekend under rules that allow for passage with a simple majority. Vice President Kamala Harris had to break a 50-50 tie after a party-line vote in the evenly divided chamber. As soon as the Senate began considering the bill, Sen. Ron Johnson, R-Wis., forced the chamber’s clerks to begin reading the entire 628-page measure aloud.

5. Connecticut among states easing some virus-related restrictions

Pharmacist Madeline Acquilano inoculates public school safety officer Victor Rodriguez with the Johnson & Johnson Covid-19 Vaccine at Hartford Hospital in Hartford, Connecticut, on March 3, 2021.

Joseph Prezioso | AFP | Getty Images

Connecticut will be relaxing many Covid mitigation restrictions in two weeks on businesses, theaters, churches and travel. But Democratic Gov. Ned Lamont said Thursday the statewide mask mandate will remain in effect. Connecticut is among many states easing virus restrictions, despite repeated warnings from health officials that opening too quickly could risk another lethal wave in the U.S. This week, the Republican governors of Mississippi and Texas went a step further, ending all Covid restrictions, including mask mandates.

— The Associated Press contributed to this report. Follow all the developments on Wall Street in real time with CNBC Pro’s live markets blog. Get the latest on the pandemic with our coronavirus blog.

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Business

5 things to know before the stock market opens Feb. 26, 2021

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Here are the most important news, trends and analysis that investors need to start their trading day:

1. Stocks try to recover from Thursday’s tech-led rout

Traders work on the floor of the New York Stock Exchange.

NYSE

U.S. stock futures were choppy as tech stocks tried to recover from Thursday’s rout that dragged the Nasdaq down 3.5% for its worst single-day performance since October. Tesla fell slightly again in Friday’s premarket, a day after sinking 8% in a brutal week. The Dow Jones Industrial Average on Thursday sank 559 points, or 1.8%, from a record closing high the previous session. The Dow had its worst day in nearly a month and so did the S&P 500, which lost almost 2.5%. The culprit behind the selloff was the rapid rise in bond yields.

All three stock benchmarks were tracking for weekly losses. Ahead of the final trading day of February, the Nasdaq was clinging to a gain for the month, which started off strong. The Nasdaq was down nearly 7% from its Feb. 12 record closing high. The Dow and S&P 500 both remain solidly in the green for the month. However, the S&P 500 was off almost 2.7% from its last record closing high, also on Feb. 12.

2. 10-year Treasury yield retreats slightly from one-year high

The 10-year Treasury yield retreated Friday morning, but remained above 1.4%, after surging to 1.6% in the previous session to its highest level since February 2020 and more than 0.5% higher since the end of January. The spike in the 10-year yield, which is used as a benchmark for mortgage rates and auto loans, has been driven by expectations of improving economic conditions as coronavirus vaccines are rolled out, as well as fears of higher inflation.

A fresh round of government stimulus checks, approved in December, sent personal income up to its biggest monthly gain since April 2020 though inflation remained tame. The Commerce Department reported Friday morning that personal income rose 10% in January, slightly beating expectations. Personal consumption expenditure inflation matched estimates at 1.5%.

3. House to pass Covid bill; Senate official says no minimum wage

Service industry workers speak in support of the introduction of the Raise the Wage Act, which includes a $15 minimum wage for tipped workers, on Jan. 26, 2021 in Washington.

Jemal Countess | Getty Images Entertainment | Getty Images

Inflation worries are being stoked on the thought that the $1.9 trillion Covid stimulus bill — which is seen passing the House on Friday — on top of accelerating growth could overheat the economy. Democrats on Capitol Hill are trying to push their relief measure, including a federal minimum wage boost to $15 per hour, through without GOP support. However, a key nonpartisan official, the Senate parliamentarian, ruled Democrats cannot include the minimum wage increase in the bill. The decision means the Senate will likely pass a different version of the bill than the House, and representatives will have to approve the plan a second time.

4. FDA panel to vote on J&J’s single-shot Covid vaccine

A healthcare worker fills a syringe from a vial with a dose of the Johnson & Johnson vaccine against the COVID-19 coronavirus as South Africa proceeds with its inoculation campaign at the Klerksdorp Hospital on February 18, 2021.

Phill Magakoe | AFP | Getty Images

A key FDA advisory panel is set to vote Friday on whether to recommend approval of Johnson & Johnson’s single-shot Covid vaccine for emergency use, which would help pave the way for a third preventive treatment in the U.S. While the full FDA doesn’t have to follow the vaccine committee’s recommendation, it often does. During similar requests by Pfizer and Moderna for vaccines, the FDA authorized those companies’ two-shot regimes a day after the panel of outside medical advisors backed emergency use authorization.

5. DoorDash stock falls after company drops first results since IPO

A DoorDash Inc. delivery bag sits on the floor at Chef Geoff’s restaurant in Washington, D.C.

Andrew Harrer | Bloomberg | Getty Images

As more and more Americans are vaccinated and the economy continues to open up more fully, companies like DoorDash, which has benefited from the stay-at-home trade, could get hurt. In its first report as a public company, the food delivery service told shareholders it expects some of the tailwinds it experienced from stay-at-home orders across the U.S. will turn around once the country gets the virus under control. Shares sank 10% in Friday premarket. Even with that drop, DoorDash would still be up nearly 50% from its $102 per share offer price back in December. While DoorDash late Thursday reported $970 million in revenue in the fourth quarter, which beat estimates, it also reported an adjusted per-share loss of $2.67.

— Follow all the developments on Wall Street in real time with CNBC Pro’s live markets blog. Get the latest on the pandemic with our coronavirus blog.

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Business

Cramer on buying growth stocks after inflation scare shakes up market

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CNBC’s Jim Cramer advised that market players have two ways to approach high-flying growth stocks that teetered and tottered their way through a volatile session on Wall Street Tuesday.

Investors can choose to join in on the sell-off that has dropped some tech names like Apple into negative trading territory this year.

The other choice — taking a cue from Federal Reserve Chair Jerome Powell’s restated commitment to leave interest rates at low levels — is to hold on for the ride and consider loading up on worthy stocks discounted from their highs, Cramer said after the market closed mixed.

“After today’s late afternoon rebound, it’s not too late to sell the more egregiously expensive stocks if you want to,” the “Mad Money” host said. “But as for the better growth stocks, down more than 10% from their highs, call me a buyer. Not all at once, not big, but a buyer nonetheless in any retest of that 9:47 a.m. low that we saw today.”

Cramer’s assessment of the current state of the market follows a roller-coaster trading day where major U.S. averages bounced from their session lows. The market suffered a steep sell-off in the morning, with the Nasdaq Composite down almost 4% at its trough, before the blue-chip Dow Jones and benchmark S&P 500 managed to etch out modest gains at the close.

The Dow advanced more than 15 points to 31,537.35 for a 0.05% gain. The S&P 500 finished 0.13% higher at 3,881.37 to end its losing streak at five. The tech-heavy Nasdaq could not muster enough for a positive day, falling 0.5% to 13,465.20, extending Monday’s losses.

“I’m happy to entertain the idea that you need to ring the register here, but I happen to like growth stocks in a reflation scare. I like growth stocks when risk is on. I like growth stocks when risk is off,” Cramer said.

“If you want to hold on to the growth stocks … you have to be prepared to take some pain, just like in late 2015 and early 2016 — that was the last great moment to buy these stocks — or you can just do some selling if you want to and try to swap back in at a lower level,” he added.

The market has toiled through a rotation as investors swap growth and tech stocks that outperformed throughout the pandemic for value plays of companies that are expected to see business return as the economy reopens. The Nasdaq is now 4.5% off its closing high earlier this month.

Worries that an inflation revival could trigger the Fed to raise interest rates, as it did in twice in a three-month span between 2015 and 2016, shook investors out of growth stocks in recent days, Cramer said. Higher rates pose a challenge to growth and utilities stocks.

Share prices in Apple, Salesforce, and ServiceNow are all down at least 3% this week.

During an appearance before Congress Tuesday, however, Powell told lawmakers that inflation remains “soft,” the labor market faces ongoing challenges and that the central bank was committed to its current monetary policy.

That reassured investors about interest rates, helping the market recover some losses.

“This time our Fed chief has vowed to hold off on raising rates — too many unemployed — but there will come a time and a point where these growth stocks will be somewhat hopeless,” Cramer said. “They’ll kind of look like they did today … before people came in to buy.”

Correction: This story has been updated to reflect the correct number of points the Dow advanced by.

Disclosure Cramer’s charitable trust owns shares of Apple and Salesforce.

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Business

Stronger economic data could power stocks that thrive in a rebound in the week ahead

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The bull of Wall Street is seen during the pass of the snowstorm on January 31, 2021 in New York City.

Eduardo MunozAlvarez | VIEW press | Corbis News | Getty Images

A decline in new Covid infections, along with improving economic data and stimulus hopes, could boost stocks that flourish in a resurging economy in the week ahead.

In the past week, expectations for a strong economic rebound helped boost interest rates.

While the broader stock market was choppy, sectors that do well in a rebound – financials, airlines and industrials – stood out as leaders. This is known as the reflation trade.

Those stocks gained at the expense of growth and technology, down 2%. Strategists expect that reflation trade to continue as signs suggest that the economy could make a sharp comeback.

The S&P 500 was down 0.7% on the week to 3,906, while the Dow was up a tiny 0.1% at 31,494. The Nasdaq was off 1.57% for the week, to 13,874, with the decline in tech. Apple, for instance, gave up 4% on the week.

The big event in the week ahead is testimony from Federal Reserve Chairman Jerome Powell, who delivers his semi-annual testimony on the economy before the Senate Banking Committee on Tuesday and the House Financial Services Committee Wednesday.

He is expected to discuss the increase in interest rates, as well as concerns that inflation could begin to take off.

“He’s going to have to acknowledge that the data is improving and the virus situation is improving quite materially,” said Mark Cabana, head of U.S. rates strategy at Bank of America. “It is going to be hard for him to sound as dovish as he has been.”

But Powell is expected to continue to emphasize that the Fed will keep rates low for a long time and maintain its easy policies to help the economy.

Improving forecasts

Economists this past week ratcheted up tracking forecasts for first quarter gross domestic product, fueled in part by an unexpectedly sharp jump of 5.3% in January retail sales.

Goldman upped first-quarter growth to 6%, and Morgan Stanley said it was tracking at 7.5% for the first quarter. Economists linked the surprise gain in retail sales to stimulus checks sent to individuals under the last $900 billion stimulus program approved by Congress in late December.

The Biden administration has proposed another $1.9 trillion Covid relief package. That could come before the House of Representatives in the coming week.

“[Powell’s] going to stick to the script. The script is lawmakers need to continue to provide support for the economy. He’s going to be supportive of the administration’s effort to get a big package through,” said Mark Zandi, chief economist at Moody’s Analytics.

Key data during the week

Earnings continue to be important. There are more than 60 companies reporting, including Home Depot, Macy’s and TJX.

Key economic reports dropping next week include durable goods on Thursday, along with personal income and spending data on Friday

The Friday report includes the personal consumption expenditure price index, which the Fed monitors. The market is on the lookout for signs of rising inflation.

“I think the boom is going to start sooner than most people think,” said Ed Keon, chief investment strategist at QMA.

He said the stronger economy is helping drive Treasury yields higher, with the 10-year hitting a one-year high of 1.36% on Friday. Keon said the vaccine rollout is helping the outlook, as is the slowing spread of the virus.

“I think people were expecting a second-half boom, but I think the second quarter is going to be very strong, as people change their behavior,” he said.

“The caution when it comes to savings and not going out, that’s going to go away sooner than we think,” Keon said. “Right now, you might see a 10% GDP number in the second or third quarter. That’s also due to the fact we’re likely to get a big stimulus package.”

He said investors are underestimating the surge in economic activity that should start in March and pick up steam in the second and third quarter as more people resume dining out and other activities.

“I think the world is going to look very different than it has over the past 12 months. We’re still bullish. We’re still overweight stocks,” Keon said.

He said a flood of money could hit the economy.

“The size of the U.S. economy last year was about $21 trillion,” Keon added. “Households now have excess savings of about $1.5 trillion and the stimulus package probably will be in the vicinity of $1.2, $1.6 trillion.”

He said the service sector should start to see a benefit that has been lifting the goods making side of the economy. “You’re going to see an incredible boom.”

Week ahead calendar

Monday 

Earnings: Dish Network, Royal Caribbean, Marathon Oil, Ingersoll-Rand, Occidental Petroleum, Transocean, Zoominfo, ONEOK, HSBC

10:00 a.m. Leading economic indicators

Tuesday

Earnings: Home Depot, Macy’s, Intuit, Thomson Reuters, Square, Toll Brothers, Jazz Pharmaceuticals, McAfee, Medtronic, Pioneer Natural Resources, Bank of Montreal

9:00 a.m. FHFA home prices

9:00 a.m. S&P/Case-Shiller home prices

10:00 a.m. Fed Chairman Jerome Powell semi-annual economic testimony Senate Banking Committee

Wednesday

Earnings: Lowe’s, NVIDIA, Viacom, Public Storage, Booking Holdings, TJX, Brookdale, Royal Bank of Canada, Apache, Petrobras, Pure Storage, L Brands, Casper Sleep

7:00 a.m. Mortgage applications

10:00 a.m. New home sales

10:00 a.m. Fed Chairman Powell semi-annual economic testimony at House Financial Services Committee

Thursday

Earnings: Salesforce.com, Norwegian Cruise Lines, Etsy, Best Buy, HP, Shake Shack, Beyond Meat, Anheuser-Busch Inbev, Dell Technologies, Virgin Galactic, American Tower, Cleveland Cliffs, Airbnb, Carvana, Door Dash

8:30 a.m. Atlanta Fed President Raphael Bostic

8:30 a.m. Jobless claims

8:30 a.m. Durable goods

8:30 a.m. Q4 GDP second reading

10:00 a.m. Pending home sales

10:00 a.m. Advanced economic indicators

10:00 a.m. St. Louis Fed President James Bullard

3:00 p.m. New York Fed President John Williams

Friday

Earnings: Fluor, Cinemark, Draft Kings, Foot Locker, AMC Networks

8:30 a.m. Personal income and spending

8:30 a.m. Advanced trade

9:45 a.m. Chicago PMI

10:00 a.m. Consumer sentiment

Saturday

Earnings: Berkshire Hathaway

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Business

5 things to know before the stock market opens Feb. 19, 2021

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Here are the most important news, trends and analysis that investors need to start their trading day:

1. Dow futures bounce after biggest one-day February loss

The Wall Street sign is seen outside The New York Stock Exchange (NYSE) in New York, February 16, 2021.

Brendan McDermid | Reuters

U.S. stock futures rose Friday after the Dow Jones Industrial Average, S&P 500 and Nasdaq suffered their biggest one-day losses in the red-hot month of February. The Dow, which broke a three-day winning streak and fell from a record closing high, remained on track for a positive week, which would be its third straight. The S&P 500 and Nasdaq are riding three-day losing streaks and are on pace for their first losing weeks in the past three.

Bitcoin — which topped $52,000 this week — hit another all-time high early Friday near $53,000 per unit. After Tesla and other companies recently showed support for the world’s biggest cryptocurrency, major financial firms also appeared to be warming to it. Treasury Secretary Janet Yellen told CNBC on Thursday she believes bitcoin is a “highly speculative asset.”

2. Treasury Secretary Yellen pushes for major Covid stimulus

Treasury Secretary Janet Yellen speaks during a virtual roundtable event with participants from local Black Chambers of Commerce on February 5, 2021 in Washington, DC.

Drew Angerer | Getty Images

As the House aims to pass its version of President Joe Biden’s $1.9 trillion coronavirus relief blueprint by the end of next week, Yellen told CNBC that a large stimulus package is necessary to get the economy back to full strength. “The price of doing too little is much higher than the price of doing something big,” she said.” We think that the benefits will far outweigh the costs in the longer run.” Democrats hope to get their bill through Congress before March 14, when key federal jobless benefit programs expire.

3. Biden to pledge billions in global Covid vaccination aid

President Joe Biden speaks during a meeting with labor leaders on coronavirus relief in the Oval Office on Wednesday, Feb. 17, 2021.

Pete Marovich | Bloomberg | Getty Images

Biden is expected to announce Friday that the U.S. will spend $4 billion on international Covid vaccination efforts. He will make the pledge during his first virtual meeting as president with G-7 leaders. Biden will also urge other nations to put more money toward the global fight against the pandemic.

Later in the day, Biden travels to Michigan to visit Pfizer’s vaccine manufacturing facility in Kalamazoo, a trip that was supposed to happen Thursday but was postponed due winter weather. Biden made his first domestic trip as president Tuesday, traveling to Wisconsin for a CNN town hall on the coronavirus.

4. Uber is dealt a major blow as UK’s top court rules drivers are workers

A driver uses the Uber app to drop off a passenger in London.

Chris J. Ratcliffe | Bloomberg via Getty Images

Shares of Uber dropped 3% in the premarket after the U.K.’s top court ruled Friday that the company’s drivers there should be classified as workers rather than independent contractors. The ruling ends an almost five-year legal battle between Uber and a group of former drivers in Britain. Uber insists its drivers are self-employed and that it acts as more of an “agency” that connects them with passengers through an app. The company weathered a challenge in its home market of California in November, when voters backed a ballot proposal that cemented app-based food delivery and ride-hailing drivers’ status as independent contractors, not employees.

5. Citadel’s Ken Griffin defends controversial Wall Street practice

Ken Griffin, Founder and CEO, Citadel

Mike Blake | Reuters

During Thursday’s GameStop hearing on Capitol Hill, Citadel’s Ken Griffin defended a controversial method brokerages use to make money and said his firm would adapt if new regulations prohibited the practice. Members of Congress spent much of their time prodding about “payment for order flow,” a practice in which a brokerage receives payment from a market maker like Citadel for directing the order to them. This model is how Robinhood and other brokers are able to offer commission-free trading. “I do believe that payment for order flow has been an important source of innovation in the industry,” Griffin said.

— Reuters contributed to this report. Follow all the developments on Wall Street in real time with CNBC Pro’s live markets blog. Get the latest on the pandemic with our coronavirus blog.

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Business

Dow futures up 180 points as stocks look to add to record levels

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Pedestrians walk in snow past the Wall Street subway station near the New York Stock Exchange.

Michael Nagle | Bloomberg | Getty Images

Futures contracts tied to the major U.S. stock indexes rose in extended trading Monday evening after finishing strong last week.

Dow futures rose 180 points, suggested an implied open of about the same magnitude, while S&P 500 contracts added 19.25 points, or 0.5%. Nasdaq 100 futures gained 67.5 points, or 0.5%.

The U.S. stock market was closed on Monday for Presidents Day.

The major averages finished last week with decent gains even as February’s rally appeared to cool off somewhat. The blue-chip Dow Jones Industrial Average posted two little changed days, while the S&P 500 swung within 0.2% for three days in a row.

Still, the S&P 500 finished the week with a gain of 1.2%, while the Dow added 1%. The tech-heavy Nasdaq Composite rose 1.7%. All three closed at record levels on Friday.

Stock strategists say the rollout of the Covid-19 vaccine, economic reopening and expectations for more fiscal stimulus are key to the market’s buoyant February thus far.

“Covid is far from defeated, but the path toward economic normalization is clearer as more vaccines that reduce hospitalizations and eliminate fatalities are approved,” Dennis DeBusschere, strategist at Evercore ISI, said in an email.

“Treasury Secretary [Janet] Yellen’s forceful arguments for additional stimulus followed by Fed Chair [Jerome] Powell describing maximum employment as ‘our national goal’ helped lift bond yields, inflation expectations, and oil prices last week,” he added.

The Dow has gained 4.9% in February, while the S&P 500 and the Nasdaq have rallied 5.9% and 7.8%, respectively. The S&P 500 has raked in ten record closes in 2021.

Pedestrians walk past a snow covered bull sculpture during a late season nor’easter in New York.

Lucas Jackson | Reuters

Still, DeBusschere warned that rising interest rates and an uncertain policy outlook could keep trading from growing too frothy in the near term and recommended investors stick to cyclical stocks that could see the most upside as the U.S. economy recovers.

Those so-called cyclical sectors, those most sensitive to an economic rebound, have led the rally in February. Energy is up more than 13% month to date, with financials and materials also among the leading sectors.

Freezing weather in regions across the U.S. sparked another rally in energy futures on Monday and put West Texas Intermediate crude contracts above $60 a barrel for the first time since the early days of the coronavirus pandemic.

In corporate news, CVS Health, Occidental Petroleum, Palantir and others will report earnings on Tuesday.

Executives from Robinhood, Melvin Capital and Citadel are scheduled to testify before the House Financial Services Committee on Thursday. Lawmakers are likely to grill the group on the wild trading in GameStop and other heavily shorted equities.

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