- The February jobs report is due at 8:30 AM ET.
- Silicon Valley Bank is in big trouble.
- General Motors offers thousands of acquisitions to salaried workers.
Here are the top stories investors need to start their trading day:
All eyes will be on the February jobs report, which arrives at 8:30 a.m. ET. If it’s a large number, and shows an increase in wages, investors are likely to grow worried about larger and faster Fed rate hikes, which Chairman Jerome Powell warned about earlier this week. What is the expectation? According to Dow Jones, economists estimate that the US economy added 225,000 jobs last month. While this is well below January’s 517,000 jobs, it is still considered a solid number – making for a “good news is bad news” scenario for the bulls.
A general view of the New York Stock Exchange front on January 13, 2015 in New York City.
Bin Haider | Getty Images Entertainment | Getty Images
We’ll see the impact of the jobs report on stocks, but the S&P 500, Nasdaq, and Dow are on track to end the week in the red. In fact, all three could end up up over 3% for the week. Stocks came off a dreadful Thursday after SVB Financial, also known as a Silicon Valley bank, spooked the financial sector. (More on that below). It looked like a similar measure could continue on Friday, as bank stocks tumbled in European markets. Follow live market updates.
Silicon Valley’s bank is in deep trouble, sparking fears of bank flight. The company’s shares plunged 60% on Thursday, and fell another 40% on heavy off-hours trading on Friday morning. The bank has been around for four decades, providing support to tech startups even during the ups and downs of the industry. But this time it looks different. SVB sent investors running for the hills this week after it sold $21 billion worth of properties at a loss of about $1.8 billion. It also raised $500 million from the private equity firm General Atlantic. Risk activity had already declined, the IPO market had largely dried up, and now interest rate hikes by the Federal Reserve are putting even more pressure on the world of high-risk tech finance. Customer funds are dwindling fast, too. “Psychologically, it’s a blow because everyone understands how fragile things are,” Scott Orn, chief operating officer of Kruze Consulting, told CNBC.
US President Joe Biden, with General Motors CEO Mary Barra, looks at the Chevrolet Silverado EV while touring the 2022 North American International Auto Show at the Huntington Place Convention Center in Detroit, Michigan on September 14, 2022. -Biden visits the auto show to highlight Focus on the electric vehicle industry.
Mandel Ngan | Afp | Getty Images
General Motors is not finished cutting staff. The Detroit automaker said Thursday it will offer buyouts to the majority of its 58,000 salaried workers in the United States. The company said it would result in a pre-tax charge of $1.5 billion. The move comes shortly after General Motors announced it would lay off about 500 white-collar workers globally. The company is looking to rein in costs as it ramps up production of costly electric vehicles to adapt to rapidly changing standards in the United States and abroad. “Employees are strongly encouraged to consider the program,” General Motors said in a statement. “By permanently reducing regulated costs, we can improve vehicle profitability and remain adept in an increasingly competitive market.”
Gap liquidation price tags are seen at a Gap retail store on September 20, 2022 in Los Angeles, California.
Alison’s Dinner | Getty Images
Gap was once the avatar of the American mass market for hipsters. These days, though, the clothing retailer is on the verge of slipping into irrelevance. Gap shares fell after its recent disappointing earnings report. Sales fell in the quarter, while the company posted a much bigger loss than Wall Street had expected. It also provided soft guidance for the current quarter and year. Gap — whose brands include Banana Republic, Athleta and Old Navy — also announced another shake-up in its executive ranks as it does not have an option for the permanent CEO position. The company said an external candidate would fill the role.
— CNBC’s Patty Dumm, Alex Haring, Ari Levy, Rohan Goswami, Michael Weiland and Gabrielle Vonrouge contributed to this report.
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