Holidays are rarely unwelcome, but the closing of stock and commodities markets for Good Friday-on a day when bonds will trade – is causing consternation among traders.
The March jobs report will be released at 8.30 am EDT. Normally on Good Friday, all markets are closed. This year, the bond market will be open long enough to let raders act on the news. Futures also will be open in the morning.
But stocks and commodities will be closed all day.
“We ‘ve got the granddaddy of all reports coming out on a Friday when 90 percent of the markets are closed”, said Jeffrey Friedman, senior market strategist at futures brokerage Lind-Waldock in Chicago. Mr. Friedman, whose firm will have a skeleton crew working, says he is preparing for swings in the markets that are open on Friday, and volatility on Monday.
The jobs report is big this time. The market is bracing for a watershed number, anticipating strong private-sector job growth-an addition of 200,000 positions-with the potential to alter the outlook for interest rates, now at historic lows.
“I’ve never heard of putting such a big number out on a day when you can’t do anything about it”, said Ralph Fogel, investment strategist at Fogel Neale Partners, who manages a portfolio of stocks as well as bonds. “Anytime that I can’t address a problem in our portfolios, I’m not a happy camper”.
Stock investors are banking on a positive report, evidence they say is needed to justify the market’s recent steady gains. Meanwhile, Treasury Investors worry a strong report will push up rates. Thin trading could exacerbate any moves.
The jobs report and Good Friday have collided in the past, such as 1994, when a big increase in payrolls sent 10-year Treasury yields up 0.20 percentage point on the Friday and another 0.20 the following Monday, said Barclays Capital analysts. When stocks opened Monday, the S &P 500 stock index, having already fallen 5.5 percent in two weeks, dropped 1.5 percent.
Whatever the bond-market action on Friday morning, it likely will be brief. “You can set up one of those ping-pong tables that folds in half and play against yourself”, said Brian Yelvington, fixed-income strategist at Knight Libertas, a Greenwich, Conn., trading firm.