“With day one behind us, there are no surprises expected in today’s hearings…[However,] how Powell responds to any specific questions about the pace of the recent rise in…” writes the Sevens Report’s Tom Essaye. Click here to read the full article.
The slight uptick in the U.S. dollar acted as a “modest headwind on precious metals…” but there was a more notable correlation between gold and Treasury note yields, said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are little changed this morning while bond markets were largely steady overnight as investors digest yesterday’s dovish comments from Fed Chair Powell and look ahead to his testimony before the House today.
Economically, German GDP was slightly better than expected while the French Business Climate Indicator narrowly missed estimates however neither report moved markets as trader focus is on central bank policy this week.
Today, there is just one economic report to watch: New Home Sales (E: 855K) before investors will settle in for another day of Humphrey-Hawkins Testimony by Fed Chair Powell which begins around 10:00 a.m. ET.
With day one behind us, there are no surprises expected in today’s hearings however, how Powell responds to any specific questions about the pace of the recent rise in yields could impact the bond markets, and if yields rise to new highs, expect more selling pressure on big tech names to weigh down the broader equity indexes.
Tom Essaye, Sevens Report Research founder and president, joins Yahoo Finance’s Alexis Christoforous to discuss the rise in yields and concerns over inflation. Click here to watch the full interview.
Tom Essaye, Sevens Report Research founder and president, joins Yahoo Finance’s Alexis Christoforous to discuss the rise in yields, concerns over inflation and the outlook for markets. Click here to watch the full interview.
“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).