Here are the most important news, trends and analysis that investors need to start their trading day:
- Wall Street looks lower after logging a multiday winning streak
- Yields no longer inverted; mortgage rates soar hurting refi demand
- ADP says U.S. companies added 455,000 jobs in March
- Russia's pledge to scale back Ukraine attacks met with skepticism
- Health regulators clear another round of Covid vaccine boosters
1. Wall Street looks lower after logging a multiday winning streak
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U.S. stock futures pointed to a lower open Wednesday, one day after the Dow Jones Industrial Average and the S&P 500 logged four-session winning streaks and the Nasdaq saw back-to-back gains. Wall Street shook off a recession signal of inverted yields in the bond market as Russia-Ukraine cease-fire talks raised hopes for diplomatic progress.
With two trading days left in March, the Dow, S&P 500 and Nasdaq were all set to break two-month losing streaks with solid gains. The Nasdaq on Tuesday closed out of correction territory, now less than 10% below its November record high. U.S. oil prices rose 2% early Wednesday after a two-day losing streak. West Texas Intermediate crude was tracking for a fourth straight monthly gain.
2. Yields no longer inverted; mortgage rates soar hurting refi demand
The yield spread between the 5-year and the 30-year Treasurys was no longer inverted early Wednesday. The 5-year yield flipped above the 30-year on Monday for the first time since 2006 and stayed that way Tuesday. The 2-year Treasury yield and the benchmark 10-year yield went virtually flat Tuesday and remained close early Wednesday.
Mortgage rates surged last week, driving total home loan volume down 6.8%. The Mortgage Bankers Association said the 30-year fixed-rate mortgage shot up 0.3 percentage point to 4.8% in the week ended March 25, the largest one-week increase since February 2011. That sent refinance applications down 15% week over week and down a whopping 60% from a year ago. Home loan purchase demand increased 1% for the week but was 10% lower than the same week one year ago.
3. ADP says U.S. companies added 455,000 jobs in March
Two days before the government's March employment report, the last one before the Federal Reserve's early May meeting, ADP said Wednesday morning that U.S. companies added 455,000 jobs in March, basically matching estimates. The total was below the upwardly revised 486,000 in February and brought ADP's first-quarter private payrolls count to 1.45 million. The ADP data during Covid has not been a great indicator of what the government's jobs report might show. The Fed has to balance worries about economic growth and a recession against soaring prices. Central bankers are expected to get more aggressive with interest rate hikes to fight inflation.
4. Russia's pledge to scale back Ukraine attacks met with skepticism
Russian attacks on Ukraine continued Wednesday, one day after Moscow promised to reduce its military activity near the Ukrainian capital of Kyiv and the northern city of Chernihiv. Russia's pledge to scale back its aggression was met with skepticism from Ukraine, the United States and Britain. Russian and Ukrainian delegates met in Istanbul on Tuesday. Ukraine's delegation laid out a framework under which the country would declare itself neutral and its security would be guaranteed by an array of other nations.
5. Health regulators clear another round of Covid vaccine boosters
The Food and Drug Administration cleared fourth Pfizer and Moderna Covid vaccine shots for everyone age 50 and older as top health officials declared the more contagious omicron subvariant, BA.2, the dominant version of Covid-19 in the U.S. The FDA also authorized a fifth dose for certain younger people with compromised immune systems. People aged 12 and older with weakened immune systems are eligible for a Pfizer fifth dose, and immunocompromised 18-year-olds and older are eligible for Moderna. The Centers for Disease Control and Prevention quickly signed off on the decision.
The CDC also recommended all adults who received two doses of Johnson & Johnson's vaccine get third shots of Pfizer or Moderna. Adults who received the J&J vaccine and a second shot of Pfizer or Moderna are not yet eligible for a third dose, unless they are age 50 and older or have compromised immune systems. All of the new boosters are to be administered at least four months after the last shot.