US stocks struggle as American job destruction accelerates: April 3, 2020

US stocks kicked off modestly lower on Friday, as investors digested a worse-than-expected March jobs report.

In premarket trading, stock index futures came off their lows following the report, as much of the bad economy news is already priced into stocks.

The March jobs report was rough. But the market knew it was coming.

US stock futures pared earlier losses after the Bureau of Labor Statistics released a worse-than-expected March jobs report, including more job losses and a higher unemployment rate than predicted.

Futures for the Dow, S&P 500 and Nasdaq Composite were all down around 0.6%.

This market reaction to disappointing economic data has become a bit of a pattern. A lot of bad news is now priced into stocks given the dramatic selloff the market witnessed over the course of March.

The labor market is expected to look ugly for at least the next few months as businesses shut and people are staying home to limit the spread of coronavirus. So far economists expect the Covid-19 recession, along with the jobs downturn, to be deep but short-lived.

But those forecasts depend on the course of the virus.

Boeing, which stopped production at its plants in Washington state on March 25, announced it will suspend production at one of its helicopter plants just outside of Philadelphia at the close of business on Friday.

"Suspending operations at our vital military rotorcraft facilities is a serious step, but a necessary one for the health and safety of our employees and their communities," said Steve Parker, a Boeing vice president in charge of the plant.

The suspension of work at plants in Washington state occurred after the coronavirus-related death of an employee in Everett, Washington. On Wednesday the United Auto Workers union, which represents the Boeing hourly employees in Philadelphia, told members there have been two confirmed coronavirus cases among employees there. While one was working remotely, one had been continuing to work at the factory. No further information on their condition was revealed.

The company said it plans to resume operations on April 20, although a decision to resume work will be based on further government guidance and actions on COVID-19 and associated impacts on operations.

America lost 701,000 jobs in March, the Bureau of Labor Statistics reported on Friday. This ends the country’s 10-year labor market expansion. The unemployment rate climbed to 4.4%, from a near 50-year low of 3.5% before.

The March jobs report does not yet reflect the past two weeks of record high jobless claims data, as the survey it is based on wraps up around the middle of the month.

Read more about the jobs report here.

The US Air Force has agreed to pay Boeing $882 million that it was holding back due to problems with a refueling tanker the company was building. But Boeing will be on the hook for an expensive fix for the plane.

The Air Force announced late Thursday that it was paying the $882 million that had previously been withheld under a new policy "to maximize cash flow, where prudent, to combat coronavirus impacts on the industry base." It had withheld the payments due to questions about Boeing's possible noncompliance on 33 KC-46 refueling tankers it had already delivered.

But Boeing and the Air Force also agreed that Boeing will redesign and retrofit a "remote vision system" on the plane at no additional cost to the government. Boeing said the new system is "orders of magnitude better than what was available when the program started." Neither Boeing nor the Air Force gave an estimated cost of the fix.

Trendy retailer H&M has been hit hard by the coronavirus pandemic.

Sales sank 46% in March with the company writing in a release that it expects its second quarter to be "very negatively impacted" by the virus.

Nearly 75% of its global stores were closed as of March 31, including in its top-selling markets of Europe and the US. In the stores that it had reopened, mainly in China, it said sales are experiencing a "gradual recovery."

H&M (HNNMY) shares are down more than 5% in Friday trading.

OPEC will meet on Monday with Russia and other oil producers in the hope of agreeing supply cuts and ending a brutal price war.

The meeting, called by Saudi Arabia, will be held via video conference and will include oil producers from outside the OPEC+ alliance that includes Russia and a few other countries, two senior sources at the OPEC secretariat told CNN Business. The final list of invitees has not yet been set, they said.

US oil prices soared 25% — their biggest one-day gain on record — on Thursday after Trump tweeted that he hopes and expects Saudi Arabia and Russia will slash output by between 10 million and 15 million barrels per day.

Prices continued to advance Friday, recovering some of the massive plunge seen over the past month. Brent crude futures, the world's benchmark, were trading more than 6% higher at $31.56 a barrel.

Read more here.

US stock futures are lower, following an upbeat day on Wall Street on Thursday.

Thursday's stock market gains came despite the highest initial jobless claims report in American history, as coronavirus forces a growing number of businesses to shutter and lay off or furlough employees.

Around 6.6 million people filed for first-time unemployment benefits in the week ended March 28 — more than the previous record of 3.3. million initial clams in the prior week — bringing the total number of initial jobless claims filed in March to more than 10 million.

Global markets showed renewed signs of weakness on Friday as the economic fallout from the coronavirus pandemic continues to weigh on investors. But oil rose again after a wild spike Thursday on talk of production cuts.

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