Tuesday April 6th


Stock futures are little changed a day after the Dow and S&P 500 close at records

U.S. stock index futures dipped in early trading Tuesday after the Dow Jones Industrial Average and the S&P 500 both closed at record highs in the prior session as strong economic data boosted hopes of a smooth recovery. Futures tied to the Dow industrials pointed to an opening loss of about 30 points. S&P 500 futures lost 0.2% and Nasdaq 100 futures shed 0.2%. Some Big Tech stocks such as Amazon, Microsoft and Nvidia were seeing slight losses in premarket trading. Wall Street rallied to record levels on Monday after Friday’s blowout jobs report and a surge in the gauge of services industry activity showed the economic rebound gained momentum amid accelerated vaccine rollout. “Vaccinations are rolling out at a record clip, and historic stimulus efforts from Congress have all paved the way for continued positive market momentum,” said Chris Larkin, managing director of trading and investing product at E-Trade Financial. Bond yields had another quiet session with the 10-year Treasury yield held steady at 1.71%, easing fears of rising inflation. The 10-year rate was down slightly Tuesday morning to 1.70%. Cleveland Federal Reserve President Loretta Mester told CNBC Monday that she is largely unconcerned by this year’s run-up in government bond yields. “I think the higher bond yields are quite understandable in the context of the improvement in the economic outlook. The increase has been an orderly increase,” Mester said. “So I’m not concerned at this point with the rise in yields. I don’t think there’s anything for the Fed to react to.” Investors continue to assess President Joe Biden’s $2 trillion infrastructure proposal announced last week and its chance to become reality. While politicians on both sides of the aisle support funding to rebuild American roads and bridges, disagreements over the ultimate size of the bill and how to pay for it remain, including Biden’s plan to raise the corporate tax to 28%. Biden said Monday he is not worried that a corporate tax hike would hurt the economy. Conservative Democrat Sen. Joe Manchin of West Virginia reportedly said he opposes the proposed tax hike to a level that high. Shares in Asia-Pacific were mixed on Tuesday, after major indexes on Wall Street surged to record closing highs overnight stateside. The Nikkei 225 in Japan slipped 1.3% to close at 29,696.63 while the Topix index dropped 1.47% to finish its trading day at 1,954.34. South Korea’s Kospi closed 0.2% higher at 3,127.08. Major stock indexes in mainland Chinese stocks were lower on the day, with the Shanghai composite slipping slightly to 3,482.97 while the Shenzhen component shed 0.278% to 14,083.34. Markets in Hong Kong were closed on Tuesday for a holiday. Strong economic data from China and the United States helped to lift oil prices on Tuesday, recouping some of the previous session’s losses, as coronavirus-led volatility continues to dominate. Brent rose 80 cents, or 1.3%, to $62.95 a barrel. U.S. West Texas Intermediate (WTI) crude rose 82 cents, or 1.4%, to $59.47. Gold rose to its highest in more than a week on Tuesday, supported by an easing dollar and lower U.S. Treasury yields, though firmer appetite for riskier assets kept bullion’s advance in check. Spot gold rose 0.2% to $1,732.53 an ounce by 1059 GMT after hitting its highest since March 25 at $1,738.32. U.S. gold futures gained 0.2% to $1,732.70.