Tuesday March 2nd

2-03-2021

Stock futures pull back after S&P 500 notches best day since June

U.S. stock index futures traded slightly lower early Tuesday after the S&P 500 rallied more than 2% Monday for its best day since June. Dow Jones Industrial Average futures implied an opening drop of about 30 points. S&P 500 futures lost about 0.1% and Nasdaq 100 futures traded slightly lower. The 10-year Treasury yield, a point of focus lately for equity investors, was flat at 1.45%. Shares of Target gained in premarket trading after reporting booming sales. Though the retailer declined to provide a forecast for 2021. U.S. equities began March on a strong note on Monday with the S&P 500 up 2.38%, the Dow Jones Industrial Average adding 1.95% and the tech-heavy Nasdaq Composite jumping just over 3% after shedding 4.9% last week. All 11 S&P sectors finished in the green and the S&P 500 posted its best day since June 5. Both the Dow and the Nasdaq clinched their best trading day since November. Economically sensitive, cyclical sectors like energy and financials continued to outperform the broader market amid optimism about vaccines and economic resurgence. Meanwhile, a pause in the market for U.S. debt allowed high-growth tech names to recoup a sizable portion of their recent losses. Facebook added 2.8%, Apple rose 5.4% and Tesla climbed 6.4%. The 10-year yield, which had kept investors on edge for much of last week, dipped to a session low of 1.41% Monday before drifting back near the flatline. The 10-year yield stabilized around that level, below its high of 1.6% last week, which encouraged investors last week’s rapid rise in borrowing costs has abated for now. “Anxiety over yields appeared largely responsible for a 3% retreat in the S&P 500 from a record high in the middle of” February, Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note. “We expect this interruption to the equity rally to be temporary and believe investors should put the pullback in context,” he added. “The rise in yields has been led by optimism over growth, not inflation worries, and so doesn’t yet pose a threat to risk assets.” Investors on Tuesday will pore over comments made by both Securities and Exchange Commission Chair nominee Gary Gensler and Federal Reserve Governor Lael Brainard. Gensler will testify before the Senate Banking Committee at 10 a.m. ET while Brainard will deliver a speech entitled “U.S. Economic Outlook and Monetary Policy” via a virtual meeting hosted by the Council on Foreign Relations. Stocks in Asia-Pacific were mixed on Tuesday following strong gains overnight for shares on Wall Street. South Korea’s Kospi jumped 1.03% to close at 3,043.87, following its return from a Monday holiday. Shares in mainland China were lower on the day, with the Shanghai composite down 1.21% to 3,508.59 while the Shenzhen component shed 0.715% to 14,751.12. Hong Kong’s Hang Seng index was more than 1% lower, as of its final hour of trading. In Japan, the Nikkei 225 fell 0.86% to close at 29,408.17 while the Topix index dipped 0.4% to finish its trading day at 1,894.85. Oil prices gave back early losses and turned positive on Tuesday, despite expectations that top producers would agree to raise oil supply in a meeting this week weighed on sentiment, already hit by concerns over slowing Chinese demand. Brent crude was unchanged at $63.69 per barrel. U.S. West Texas Intermediate crude advanced 10 cents, or 0.16%, to $60.74 per barrel. They both touched the lowest in more than 6 days, extending losses that started late last week. Gold prices inched up on Tuesday, having earlier slid to its lowest in 8-1/2 months, as U.S. Treasury yields eased and offset pressure from a stronger dollar. Spot gold was up 0.2% to $1,727.16 per ounce by 1200 GMT after falling to $1,706.70, its lowest since June 15. U.S. gold futures were up 0.3% to $1,727.40.