“We look at it not just from an absolute level of yields, but also the pace of increase,” Tom Essaye, founder of Sevens Report, wrote in a Feb. 17 note, according to S&P Global Market Intelligence, adding that, “if yields rise too quickly (and the 10 bps/day rallies continue)…” Click here to read the full article.
March copper HGH21, 0.86% climbed by 1.6% to $4.141 a pound. Copper futures gained nearly 7.6% last week “with the upside move accelerating into the weekend as traders bet on sustainably strong demand given…” analysts at Sevens Report Research wrote in a Monday newsletter. Click here to read the full article.
What’s in Today’s Report:
Stock futures are in the red this morning, led by a 1.5% drop in Nasdaq futures as weakness in big tech names is dragging equity markets lower for a sixth consecutive day despite stabilizing bond yields.
Economically, the Eurozone HICP report met expectations at 0.2% in January, easing some recent inflation concerns.
Looking into today’s session, there are a few economic reports due to be released early in the day: Case-Shiller Home Price Index (E: 0.9%), FHFA House Price Index (E: 0.8%), and Consumer Confidence (E: 89.7) before focus will shift to Fed Chair Powell’s Congressional testimony which begins at 10:00 a.m. ET.
Specifically, investors will be looking for Powell to reiterate the Fed’s very accommodative stance on policy for the foreseeable future as well as his responses to any questions regarding the recent, sharp rise in interest rates.
In the afternoon, there is a 2-Yr Treasury Note auction at 1:00 p.m. ET which should not move markets unless very soft demand, and subsequently higher yields suggests the market is becoming more hawkish on Fed policy given recent “hot” inflation data.
“Small companies are more dependent on debt to fund…” Tom Essaye, founder of Sevens Report Research wrote in a note. Rising rates also reduce the value of future profits, leading to lower expectations for current stock prices. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately lower as Treasury yields resumed their rise early Monday morning.
The 10 year Treasury yield rose as high as 1.39% earlier this morning and that’s weighing on futures as the rise in yields continues from last week.
Economic data was sparse overnight as the only notable number was the German Ifo Business Expectations survey which beat estimates (94.2 vs. (E) 91.8).
There was no notable news regarding stimulus or vaccines over the weekend, and the market still expects the JNJ vaccine to be approved this Friday (2/26) and for the stimulus bill to pass the House around the same time (with Biden signing the bill sometime in mid-March/early April).
Today there are no notable economic reports nor any Fed speakers (Powell speaks tomorrow), so the focus today will be on Treasury yields. If they continue to rise, I’d expect modest to moderate pressure on stocks ahead of Powell’s testimony tomorrow (where markets will want some comfort that the Fed isn’t worried about yields).
“The number of potential catalysts for a sudden, disorderly rise in yields that hits stocks has risen…” wrote Tom Essaye, founder of Sevens Report Research in a note. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower following a quiet night of news as global bond yields remained buoyant.
Bond yields were slightly higher earlier this morning and they are holding this weeks’ gains, and absent any other notable news that weighed on global stocks and futures.
There was no notable economic data other than the Australian Labour Force Survey which met expectations.
Today economic will be in focus and if the data comes in better than expectations, look for the 10 year yield to rise further (and that could put a headwind on stocks and tech especially). The key reports today are: Jobless Claims (E: 757K), Philadelphia Fed Manufacturing Index (E: 20.0) and Housing Starts (E: 1.650M). We also get two Fed speakers, Brainard (8:00 a.m. ET) and Bostic (10:00 a.m. ET) but we don’t expect them to move markets.
What’s in Today’s Report:
Stock futures are slightly lower this morning following a mostly quiet night of news as investors continue to cautiously eye this week’s sharp rise in bond yields.
The 10-Yr Note yield notably topped 1.33% overnight, pressuring S&P futures to session lows but yields have pulled back and stock futures have stabilized in pre-market trading.
Looking into today’s session, there are multiple economic reports to watch this morning including: Retail Sales (E: 1.0%), Industrial Production (E: 0.5%), PPI (E: 0.4%), and the Housing Market Index (E: 83).
As we move into the afternoon, focus will be on the 20-Yr Treasury Bond Auction at 1:00 p.m. ET as the results could move yields and in turn impact equity markets.
Then, the FOMC Meeting Minutes will be released at 2:00 p.m. ET, and finally Robert Kaplan is scheduled to speak at 6:05 p.m. ET.
With the slew of potential catalysts on the calendar today, bond yields will be the key factor to watch as if we see another sharp rise in the 10-year it will act as an increasing headwind for stocks.
What’s in Today’s Report:
U.S. equity futures are trading solidly higher with international markets this morning thanks to positive COVID-19 headlines and mostly encouraging economic data overnight.
New coronavirus cases in the U.S. fell below 100K/day for the first time in months over the weekend while Biden is expected to speak about the new stimulus package today.
Economically, the Q4 Eurozone GDP Flash and details of the German ZEW Survey both topped estimates overnight which is helping support risk-on money flows this morning.
Looking into today’s session, there is one economic report ahead of the bell: Empire State Manufacturing Index (E: 5.7), and just one Fed official scheduled to speak in the afternoon: Daly (3:00 p.m. ET).
Bottom line, as long as the Empire data, which is importantly a February report, does not disappoint and Biden maintains a very accommodative tone regarding the new stimulus package, stocks should be able to continue higher to start the week today.
What’s in Today’s Report:
Futures are modestly lower mostly on digestion of the week’s rally, but also on some incrementally negative COVID policy headlines.
Over the past 24 hours headlines of possible COVID related travel bans to Florida and negative COVID testing requirements for interstate air travel weighed on sentiment. Both would be economically negative (and the later a total disaster for airlines).
Economically, the only notable data was UK GDP and UK Industrial Production, and the results were mixed. But, neither number is moving markets.
Focus today will be on any incremental COVID policy headlines, and if there’s traction on the any travel bans to states or it looks like people will need negative COVID tests to fly, that will hit stocks. Away from COVID policy, we get Consumer Sentiment (E: 80.9) and have two Fed speakers: Williams (10:00 a.m. ET) and Daly (3:00 p.m. ET) but unless there’s a major surprise, they shouldn’t move markets.