Monday April 23rd

23-04-2018

US stocks set to open little changed as 10-year yield approaches 3%

U.S. stock index futures traded little changed ahead of Monday's open as Wall Street kept an eye on rising interest rates. Around 7:05 a.m. ET, Dow Jones industrial average futures rose just 2 points, indicating a gain of 1.06 points at the open. Nasdaq 100 and the S&P 500 futures indicated a relatively flat start to Monday's session for their respective markets. The 10-year Treasury note yield rose to 2.99 percent on Monday. The benchmark yield last traded at 3 percent or higher in early 2014. Rates have been rising this month as investors bet on more inflation and tighter monetary policy from the Federal Reserve. Earlier in April, the Fed released the minutes from its March meeting, which stated that "all participants" expected a strengthening economy and rising inflation in the coming months. Also this month, prices for everything from oil to wheat have jumped. Earnings season continued on Monday, with Halliburton, Alaska Air, and Hasbro all posting quarterly results. Halliburton's quarterly profit matched analyst expectations, while its revenue missed. Hasbro, meanwhile, fell more than 3 percent after its earnings and sales fell short of estimates. Alaska Air reported a stronger-than-expected profit but disappointing revenue. In economic data, a flash reading of the latest composite purchasing managers' index (PMI) will be published 9:45 a.m. ET, while existing home sales will follow shortly after, at 10 a.m. ET. Asian stocks closed mostly lower on Monday, as investors kept an eye on rising U.S. Treasury yields and digested declines in technology stocks seen stateside. The Nikkei 225 shed 0.33 percent, or 74.20 points, to close at 22,088.04 while the broader Topix finished the day nearly flat. Elsewhere, the Kospi closed off by 0.09 percent at 2,474.11 ahead of an inter-Korea summit due to take place at the end of the week. Greater China markets reversed earlier gains, with the Shanghai composite slipping 0.09 percent to end at 3,068.80 and the Shenzhen composite closing down 0.8 percent at 1,764.20. Hong Kong's Hang Seng Index eased 0.26 percent by 3:02 p.m. Oil prices fell sharply on Monday on rising U.S. borrowing costs and the prospect of further output rises after another increase in the weekly rig count, although the overall picture for crude remained bullish. Brent crude futures were down 75 cents, or 1 percent, at $73.31 a barrel by 8:40 a.m. ET (1240 GMT), while U.S. West Texas Intermediate (WTI) crude futures fell 98 cents, or 1.4 percent, to $67.42 a barrel. Gold hit a two-week low on Monday, as investors piled into the dollar with U.S. Treasury yields approaching 3 percent and geopolitical tensions eased. Spot gold was down 0.58 percent at $1,328.70 per ounce at 8:13 a.m. ET, after earlier touching its lowest since April 9 at $1,326.91. U.S. gold futures for June delivery fell 0.71 percent to $1,328.80 per ounce.