US Stocks Poised To Open Lower After Thursday's Plunge: Can Jobs Data Help Reverse Sentiment?

Trading in the U.S. index futures suggests stocks could extend their sell-off on Friday, although the jobs report due ahead of the market open could change the entire complexion depending on how the numbers shape up.

Cues From Thursday’s Trading:

Thursday saw panic selling in the market as traders liquidated stocks in droves as they took stock of the situation at SBV Financial Group’s SIVB subsidiary, the Silicon Valley Bank. After holding barely above the unchanged line until early afternoon trading, the averages lost ground and steadily declined through the remainder of the session.

The S&P 500 Index settled at its lowest since Jan. 19 and also dropped below its 200-day moving average, a key support level. The Dow Industrials plunged to a four-month low.

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Financial stocks got pummelled on Thursday and real estate, communication services, consumer discretionary and material stocks also witnessed marked weakness.

Analyst Color:

Most economists are modeling a slowdown from January’s red-hot numbers. Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, said, “What I expect tomorrow is a return to the previous trend of strong performance but with signs of progressive slowing. Job growth should come in around 200,000, wage growth should continue to moderate, and unemployment should tick back up a bit. If that happens.”

“It will mean the economy continues to grow but slowly—which is exactly what we need for a soft landing.”

Futures Today

In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY fell 0.33% to $390.28 and the Invesco QQQ Trust QQQ edged down 0.16% to $292.18, according to Benzinga Pro data.

Upcoming Economic Data:

The Bureau of Labor Statistics is due to release its February non-farm payrolls report at 8:30 a.m. EST. Economists, on average, expect non-farm payroll growth of 205,000 for February, slower than January’s gain of 517,000. The jobless rate is expected to stay put at 3.4% and the average hourly earnings, an inflation measure, may have increased 4.4% year-over-year compared to January’s 4.4% growth.

Stocks In Focus:

• SVB Financial traded down over 34% in premarket trading following its 60% plunge on Thursday.
• Oracle Corp. ORCL, DocuSign Inc. (NASDAQ: DOCU and Gap Inc. (NYSE: GPS) moved to the downside, in reaction to their respective quarterly results.

Top Analysts’ Call

• Oracle: Piper Sandler reiterates at Overweight with $104 price target
• KeyCorp. KEY: Baird upgrades from Neutral to Outperform with $20 price target.
• United Airlines Holdings UAL:  Barclays upgrades from Equal-Weight to Overweight, increases price target from $52 to $80.
• Alaska Air Group ALK: Barclays upgrades from Equal-Weight to Overweight, increases price target from $54 to $62.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures were lower for a fourth straight day and traded down 0.62% to $75.22 in the early European session.

The 10-year Treasury note yield pulled back below 3.9% and held around 3.85%.

The major Asian markets plunged on Friday, dragged lower by the markedly negative sentiment on Wall Street overnight. Hong Kong’s Hang Seng Index and the S&P ASX 200 of Australia slumped 3.04% and 2.28%, respectively.

European stocks were plunging hard on Friday amid a sell-off in financial stocks. The declines came despite some upbeat economic data from the region. The U.K. economy rebounded by 0.3% in January, monthly GDP data released by the Office Of National Statistics showed.

Read Next: What To Expect From Friday's Jobs Report: Barclays Economist Breaks It Down