Jobs Report, Tesla Cuts Prices, Bed Bath & Beyond Seeks Reverse Stock Split, and US Stock Markets Closed

U.S. equity markets and most European markets are closed Friday in observance of Good Friday. U.S. bond markets will be open until noon ET.

Eight of 11 market sectors closed higher Thursday. Communications services (up 1.71%) and utilities (up 0.74%) posted the day’s best gains. Energy (down 1.47%) and materials (down 0.74%) posted the largest losses. The Dow closed up 0.01%, the S&P 500 closed up 0.36%, and the Nasdaq Composite closed up 0.76% on Thursday.

Two-year Treasuries rose 3 basis points to end the day at 3.82% on Thursday, and 10-year notes were unchanged, closing at 3.3%. In Friday’s premarket, 2-year notes were trading at around 3.83%, and 10-year notes traded at about 3.31%.

Thursday’s trading volume was well below the five-day average, and NYSE winners outpaced losers by 1,625 to 1,350, while Nasdaq decliners led advancers by more than 5 to 4. Two-year Treasuries have added around 10 basis points, and 10-year notes have jumped by around 7 basis points.

The weekly report on new claims for jobless benefits showed a larger-than-expected increase in new claims. A sharp downward revision from 246,000 new claims to 198,000 for the prior week indicates that last week’s rise to 228,000 initial claims may indicate that Fed rate hikes are working to cool the economy. Continuing claims also support that conclusion, at least a little, rising from an upwardly revised 1.817 million to 1.823 million.

At 8:30 a.m. ET Friday morning, the Bureau of Labor Statistics released its March employment situation report. Nonfarm payrolls rose by 236,000 last month, above the consensus estimate of 230,000. The unemployment rate ticked down from 3.6% to 3.5%.

On April 18, the U.S. Internal Revenue Service will release its list of electric vehicles that qualify for the full $7,500 tax credit in 2023. To qualify for half of the credit, vehicles will have to source materials like lithium, nickel, and other battery components from North America. The other half of the credit is based on the vehicle’s price. Eligibility for the full amount of the credit also diminishes as a buyer’s income increases.

That list was not expected to include the Model 3 or the Model Y from Tesla Inc. (NASDAQ: TSLA). As a result, the EV maker has lowered prices for the third time this year, according to Electrek. Tesla’s website Friday morning showed a $1,000 drop in the Model 3 price and a $2,000 cut to the Model Y price. Tesla also cut its prices for the more expensive Model X and Model S by $5,000.

Bed Bath & Beyond, Inc. (NASDAQ: BBBY) filed a proxy statement on Wednesday, announcing a special shareholders’ meeting on May 9 to vote on a proposed reverse stock split. The company said the exchange would be 1 new share for between 10 and 20 existing shares of common stock.

The company said in its filing that it “needs to raise equity capital to have the necessary cash resources to fund operations and service obligations” under the terms of its August 2021 credit agreement. Last month, Bed Bath & Beyond agreed to allow B. Riley to sell up to $300 million in common stock and, in a separate agreement, retained the right to sell $1 billion in common stock or authorize an exchange cap to an affiliate of B. Riley.

Bed Bath does not have enough authorized shares of common stock to meet the terms of its agreement with B. Riley. At Thursday’s closing price of about $0.31 per share, the 260,329,548 available shares have a value of just $80.7 million. Boosting the share price by a factor of 10 would do the trick, but will investors believe that they are not just throwing good money after bad? Bed Bath may be beyond saving.

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