Wall Street remained unwilling to commit to significant positioning ahead of Friday’s jobs report, with stocks eking out gains, bonds trading mixed and the dollar barely budging.

Big tech led a rebound in equities, which also got a respite after Federal Reserve Bank of St. Louis President James Bullard said he doesn’t think tighter credit conditions stemming from the recent banking turmoil will tip the economy into recession. Still, uncertainties on whether the payrolls data will show inflation is cooling or fuel economic worries put many traders on hold.

As investors have aggressively priced in rate cuts this year, a “too hot” payrolls number would undermine those expectations, while a “too cold” report would add to concerns about a hard landing, according to Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. 

“There are two-sided risks to this jobs report for the first time in a long time, and to hold the recent rally, we will need a ‘just right’ number, otherwise we should prepare for more volatility,” Essaye noted.

In the run-up to the jobs data and the long weekend, trading volume in the S&P 500 was below the average of the past month. The Nasdaq 100 outperformed major benchmarks, with Google’s parent Alphabet Inc. and Microsoft Corp. climbing at least 2.5 per cent. Boeing Co. rose on a Bloomberg News report that the company plans to boost output of its 737 jets in a push for more cash.

Treasury two-year yields, which are more sensitive to imminent Fed moves, topped 3.8 per cent. Benchmark 10-year rates dropped for a seventh consecutive session, trading near 3.3 per cent.


The jobs report is expected to show another strong month of hiring in March and the unemployment rate holding near a historic low, according to the economists surveyed by Bloomberg.

To Yung-Yu Ma at BMO Wealth Management, there’s probably a bit of a sweet spot where the Fed sees tangible evidence that the economy is cooling. But you don’t want to see so much softness that the concerns of acceleration and downside momentum start to become more pronounced.

“That ‘sweet spot’ is probably around 100,000 to 200,000 jobs created where the market can take some comfort that we’re on a softening trajectory, but one that’s not gaining momentum to the downside,” he noted.

It’s worth noting that Bullard also reiterated Friday that the central bank should keep raising interest rates to fight high inflation.

Data Thursday showed applications for U.S. unemployment benefits signaling the labor market still remains relatively strong, even though revisions indicated some emerging signs of softening.

“Jobless claims this morning came in a little higher than expected and that lends credence to the idea that the Fed’s rate hikes are beginning to cool down the labor market and slow down the economy,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “No one knows what it will take to bring inflation back down to the 2 per cent target, but the odds are much higher that it will cause a recession – and even a significant recession – than most people are currently willing to believe.”

Bloomberg Economics’ recession-probability model, which relies on 13 indicators, sees a 97 per cent chance of recession occurring as soon as July, up from 76 per cent in the previous update - and that’s even before factoring in fallout from the banking crisis and oil-price shock. The 12-month-ahead recession probability remains at 100 per cent. 

“With recent banking turmoil raising uncertainty, oil prices spiking and the full impact of past monetary tightening yet to hit the economy, it will be hard to avoid a recession this year,” wrote analysts Eliza Winger and Anna Wong.

The International Monetary Fund warned that its outlook for global economic growth over the next five years is the weakest in more than three decades, urging nations to avoid economic fragmentation caused by geopolitical tension and take steps to bolster productivity.


Investors, shaken by the ongoing turmoil in the banking industry and seeking higher yields, are racing into money-market funds.

More than US$300 billion flowed into those products in the three weeks ending March 29, according to the Investment Company Institute. That pushed assets to a record US$5.2 trillion, topping the US$4.8 trillion pandemic peak

As traders parse economic data for signs of a slowdown, the upcoming earnings season will have added significance. It officially kicks off on April 14 when large US lenders including JPMorgan Chase & Co. and Citigroup Inc. report results.

Analyst consensus expectations are for S&P 500 earnings-per-share to fall 7 per cent in the first quarter from a year earlier, marking the sharpest decline since the third quarter of 2020 and a low point in the profit cycle, Goldman Sachs Group Inc. strategists including Lily Calcagnini and David Kostin wrote in a note. 

“If analyst projections are realized, this quarter will represent the trough in S&P 500 earnings growth,” they wrote.

Key events this week:

  • U.S. unemployment, nonfarm payrolls, Friday
  • Good Friday. U.S. stock markets closed, bond markets close for part of the day

Some of the main moves in markets:


  • The S&P 500 rose 0.4 per cent as of 4 p.m. New York time
  • The Nasdaq 100 rose 0.7 per cent
  • The Dow Jones Industrial Average was little changed
  • The MSCI World index rose 0.2 per cent


  • The Bloomberg Dollar Spot Index was little changed
  • The euro rose 0.2 per cent to US$1.0923
  • The British pound fell 0.2 per cent to US$1.2443
  • The Japanese yen fell 0.4 per cent to 131.78 per dollar


  • Bitcoin fell 0.5 per cent to US$28,023.92
  • Ether fell 1.8 per cent to US$1,871.52


  • The yield on 10-year Treasuries declined two basis points to 3.29 per cent
  • Germany’s 10-year yield was little changed at 2.18 per cent
  • Britain’s 10-year yield was little changed at 3.43 per cent


  • West Texas Intermediate crude fell 0.1 per cent to US$80.51 a barrel
  • Gold futures fell 0.7 per cent to US$2,022.20 an ounce