Jobs Report, BUZZ ETF, Tech Stocks, Costco, Stimulus - 5 Things You Must Know Friday

Stock futures rise as the U.S. adds more jobs than expected in February; bond volatility sends the Nasdaq lower for the year; the BUZZ ETF falls in its debut; Costco's earnings miss forecasts on higher wage costs.
Author:
Updated:
Original:

Here are five things you must know for Friday, March 5:

1. -- Stock Futures Rise Ahead of Jobs Report

Stock futures were higher Friday as the U.S. added 379,000 jobs in February, higher than forecasts, and the unemployment rate fell to 6.2%.

Contracts linked to the Dow Jones Industrial Average rose 87 points, S&P 500 futures rose 12 points and Nasdaq futures were up 24 points.

The S&P 500 fell for a third straight session Thursday and the tech-heavy Nasdaq dropped 2.11% as Treasury yields jumped after Federal Reserve Chairman Jerome Powell disappointed investors by not taking a firmer stance against rising inflation and heightened bond market volatility. The Nasdaq turned negative for the year.

Powell said the recent surge in Treasury yields caught his attention but that the central bank would be patient before changing policy even if inflation were to tick higher.

"The market’s translation of 'patient' is that patient doesn’t mean 'never,' and that Powell is indicating that easy money will at a certain point come to an end," said Mike Loewengart, managing director of investment strategy at E*Trade.

"So while the verbiage isn’t too far away from the Fed’s previous stance, it’s enough to move a jittery market south. It’s a safe assumption that the Fed won’t act any time soon, but clearly inflation is in their crosshairs," he added.

The yield on the benchmark 10-year Treasury traded lower at 1.619% early Friday.

Oil prices rose Friday after members of the OPEC+ alliance agreed to leave crude production unchanged.

The Senate, meanwhile, began debating President Joe Biden's $1.9 trillion stimulus bill. Approval of the package - the nation's sixth stimulus package in about a year since the pandemic began - could come this weekend.

2. -- Friday's Calendar: Jobs Report for February

The U.S. economic calendar for Friday includes the official U.S. jobs report for February at 8:30 a.m. ET. 

The U.S. added 379,000 jobs last month and the unemployment rate fell to 6.2%.

Economists surveyed by FactSet expected the U.S. to have added 175,000 last month, higher than January's disappointing increase of 49,000. The unemployment rate was forecast to tick higher to 6.4% in February from 6.3%.

Earnings reports are expected Friday from Big Lots  (BIG) - Get Report and Hibbett Sports  (HIBB) - Get Report.

3. -- BUZZ ETF Falls in Trading Debut

The VanEck Vectors Social Sentiment ETF  (BUZZ) - Get Report which has been promoted by Barstool Sports founder Dave Portnoy, fell 3.6% in its debut Thursday but was rebounding almost 3% in premarket trading Friday.

The fund is built around 75 stocks - each with a minimum market cap of $5 billion - that were chosen by an algorithm on the basis of their positive social media sentiment. It began trading on the New York Stock Exchange Thursday.

About $438 million worth of shares in the fund changed hands on Thursday, making it the third best ETF debut on record, according to Bloomberg.

TheStreet's Jim Cramer said the ETF and its stock selection technique were "fascinating" and likely will move many of the 75 names inside it if traders take up Portnoy's call to invest.

Cramer sat down with Portnoy to talk about the ETF in these videos:

Dave Portnoy, Jim Cramer Sit Down to Discuss BUZZ ETF

Dave Portnoy Isn't Sweating Thursday's Market Selloff

Inside BUZZ ETF: Cramer's Interview With Davey Day Trader

4. -- Costco's Earnings Miss Forecasts on Higher Wages

Costco  (COST) - Get Report declined about 1% in premarket trading Friday after the wholesale retailer's earnings missed analysts' forecasts on costs related to higher wages workers received during the COVID-19 pandemic.

Earnings in Costco's fiscal second quarter rose from a year earlier to $951 million, or $2.14 a share. But the period included pretax charges of $246 million, or 41 cents a share, related to what Costco called “premium” pandemic wages.

Analysts were expecting earnings of $2.45 a share.

Revenue rose 15% in the quarter to $44.77 billion and topped analysts' expectations of $43.7 billion. Same-store sales rose 12.9%, excluding the impact of gasoline sales and currency movements. E-commerce sales jumped 74.8%.

"Overall, the quarter looks solid when excluding some of the COVID-19-related costs that will be cut in half going forward as the February comps numbers remain elevated and membership income continues to consistently increase," said Jim Cramer and the Action Alerts PLUS team, which holds Costco in its portfolio. "With inflation on everyone's mind, the value of a Costco membership will never be greater due to the company's goal of being the last to raise prices and the first ones to lower. Only a retailer of Costco's size, scale, and commitment to customers can do this."

5. -- Broadcom Falls as Chip Sales Miss Estimates

Broadcom  (AVGO) - Get Report was falling nearly 2% in premarket trading Friday after sales at the company's main chip division missed Wall Street estimates.

Fiscal first-quarter sales in Broadcom's semiconductor solutions division were up 74% to $4.91 billion, below forecasts of $4.93 billion.

CEO Hock Tan told analysts on a conference call that chip revenue in Broadcom's fiscal second-quarter would rise about 17%. 

Overall revenue in the second quarter was forecast at $6.5 billion, higher than expectations of $6.33 billion.

Broadcom's first-quarter adjusted earnings and sales beat forecasts.

"Bottom line, while some may nitpick the semiconductor sales or gross margin performance, this was an overall solid release," said Jim Cramer and the Action Alerts PLUS team, which holds Broadcom in its portfolio.

"That said, even Broadcom is not immune to the supply side tightness seen throughout the industry ... We believe management is doing a very good job of navigating the environment and communicating with both their suppliers and customers," the AAP team added.