The minute of the Tuesday market
- Global equities are prolonging their declines, as bond yields rise and commodity prices jump, as prospects for growth and inflation improve.
- Professor Johns Hopkins sees collective immunity for the United States in April, as Britain relaxes lockdown restrictions and prepares for its exit from the pandemic.
- Copper prices hit a new 9.5-year high as Brent moves closer to $ 60 a barrel as demand prospects improve and production delays in Texas push prices higher.
- Benchmark 10-year Treasury yields are testing 1.40% in overnight trading as Fed Chairman Powell prepares for his testimony to the Senate Banking Committee later today.
- Tesla shares have fallen to the lowest levels since Christmas as rival Lucid Motors braces for a new listing.
- U.S. equity futures suggest a weaker opening on Wall Street ahead of Home Depot and Macy’s fourth quarter results and testimony from Federal Reserve Chairman Jerome Powell at 10:00 a.m. EDT.
U.S. equity futures fell on Tuesday as tech stocks led the decline, as market interest rates around the world continued to climb amid improving hopes of a recovery and an end to short term of the global pandemic.
Commodity prices continue to suggest a strong rebound in global demand in the second half of the year, with three-month copper futures in London hitting a nine-and-a-half-year high of $ 9,305 per tonne in London and tests on Brent. the market of $ 66 per barrel at the start of European negotiations.
Bank of America has raised its US GDP forecast for this year and next, forecasting 6.5% growth for 2021, as cities reduce trade restrictions amid sharply slowing infections and steadily rising rates vaccination.
Johns Hopkins Professor Martin Makaray, in fact, has suggested that the United States will achieve so-called “herd immunity”, in terms of natural infections and vaccinations, sometime in April.
Prior to that, however, President Joe Biden is likely to have signed a $ 1.9 trillion coronavirus stimulus bill, currently under development in Congress, which will see both $ 1,400 in checks sent. to American households while adding trillions more to the country’s already huge debt load. .
Corresponding movements in bond yields suggest that investors are at the mercy of the inflationary impact of both the new stimulus and the pace of the recovery, with benchmark 10-year notes hitting a new 13-month high of 1.396% in day to day negotiation.
Investors are likely to rely on the testimony of Federal Reserve Chairman Jerome Powell before the Senate Banking Committee at 10:00 a.m. Eastern Time – the first of his two appearances before lawmakers this week – to find out how long the central bank is prepared to tolerate faster inflation pending a fuller economic recovery.
Stock futures, meanwhile, appear poised for another opening bell pullback, with the Nasdaq Composite Index – the most sensitive to interest rate hikes – valued at a drop of 125 points.
S&P 500 futures are poised for a 26 point drop while contracts linked to the Dow Jones Industrial Average suggest a 105 point pullback.
First market moves to note include Tesla Inc shares (TSLA) – Get the report, which are down more than 8% in pre-market and are heading to the lowest levels since Christmas Eve.
The pullback could be linked to bitcoin’s volatility, which fell to $ 46,940 each in overnight trading, bringing its pullback from last week’s all-time highs to around 19.2%. Tesla said earlier this month that it has invested around $ 1.5 billion in cryptocurrency.
Overnight in Europe, stocks extended their decline for a second straight session as interest rates edged up, with the Stoxx 600 falling 1.16% in Frankfurt and the UK FTSE 100 slipping 0.4 % in London.
In Asia, the Nikkei 225 in Tokyo was closed for the traditional Emperor’s birthday celebration, while the region-wide MSCI non-Japan benchmark edged up 0.26% to approaching the last hours of trading.