Stock Traders Sleep, Bond Markets Work as U.S. Jobs Report Hits

By Elizabeth Stanton
April 1 (Bloomberg) -- Tom Schrader, co-head of U.S. stock trading at Stifel Nicolaus & Co., plans to sleep in tomorrow.
That’s not an option for all of his bond-market colleagues, said William Heinzerling, the firm’s head of fixed income.
The New York Stock Exchange observes the Christian holiday of Good Friday. The U.S. government doesn’t, sticking to its regular schedule of releasing economic reports with the potential to move markets.
This year, there’s an added wrinkle for at least the fourth time since 1996: Good Friday, whose timing depends on the cycles of the moon, coincides with the Labor Department’s employment report that’s sent out on the first Friday of every month. It’s the most influential planned event for the bond market, according to David Ader, head of government-bond strategy at CRT Capital Group LLC in Stamford, Connecticut.
"I will get up and check the numbers, but I won’t worry about it for the rest of the day," said Schrader of Baltimore- based Stifel. "There’s nothing anybody in equities can do anyway."
The Labor Department will publish the data at 8:30 a.m. in Washington tomorrow. Trading of futures linked to the Standard & Poor’s 500 Index and Dow Jones Industrial Average, the benchmark measures of U.S. stocks, will continue until 45 minutes later on CME Group Inc.’s Chicago Mercantile Exchange.
Shares of individual companies won’t change hands on the NYSE and Nasdaq Stock Market. Exchanges from London and Sao Paulo to Paris, Frankfurt and Toronto will also be shut.

Trading Volume

The jobs report may boost stock-trading volume on April 5, when traders and investors return to work, said David Bellantonio. He’s the head of U.S. trading in New York at Instinet, which says it handles about 4 percent of the nation’s equity transactions.
Employers in the U.S. added positions in March, economists said before the report. Payrolls probably rose by 184,000, the most since March 2007, according to the median of 81 forecasts in a Bloomberg News survey.
The smaller-than-estimated decline in payrolls the month before triggered a 1.4 percent rally in the S&P 500 on March 5 and a jump in the benchmark 10-year Treasury note’s yield to
3.68 percent from 3.60 percent. Optimism that the economic recovery will last has driven the S&P 500 up 2.7 percent since then, and the Treasury note’s yield reached 3.92 percent, the highest since June, last week.
The last time monthly employment data, Good Friday and a closed stock market coincided was in 2007.

More Than Estimated

After the Labor Department said on April 6, 2007, that employers added 50,000 more jobs than economists projected, the 10-year Treasury yield jumped to an eight-week high of 4.75 percent from 4.68 percent. June futures on the S&P 500 climbed
0.4 percent. On Monday, April 9, the S&P 500 and Dow rose 0.1 percent to six-week highs. Gains were limited by a 4.3 percent retreat in the price of crude oil, which dragged down shares of energy producers.
Good Friday on April 5, 1996, saw the 10-year Treasury yield jump 0.20 percentage point, the most in a month, after an increase in payrolls was more than twice as large as estimated.
When the NYSE reopened on April 8, the S&P 500 slid 1.8 percent and the Dow fell 1.6 percent.
While the bond market will be open tomorrow, the Securities Industry and Financial Markets Association recommended that trading end early at 12 p.m. in New York. In 2008 and 2009, Sifma recommended no trading on Good Friday given the absence of major economic news.
"It’s business as usual for us," said Mark Porterfield, a spokesman for Pacific Investment Management Co. in Newport Beach, California, which manages the world’s biggest bond fund.
Any changes in bond prices tomorrow won’t be reflected in mutual fund share prices until April 5. Mutual funds are governed by their prospectus language, which typically states that a share price is calculated on days when the NYSE is open, said Peter Salmon, director of operations and technology at the Investment Company Institute in Washington.
"Funds are closed when the NYSE is closed," Salmon said.