Dow Futures Gain On Reopening Trade; US Yield Move Pushes Nasdaq Lower

Stocks are on the move Friday as the U.S. pledges to have 200 million vaccine doses administered by early May and the economy shows further signs of an accelerating post-pandemic rebound.
Author:
Updated:
Original:

The Friday Market Minute

  • Global stocks extend gains heading into the final trading days of the month with U.S. markets seeing support amid a noted divergence with Europe in terms of post-pandemic potential.
  • U.S. dollar index rises to the highest levels since the November election as domestic assets continue to find favor among foreign investors.
  • Benchmark 10-year Treasury note yields rise to 1.68% following yesterday's disappointing 7-year note auction and further signs of a solid post-pandemic recovery.
  • Oil prices rebound as Suez Canal blockage continues into its third day, with salvage experts warning that removing the 1,300-foot Ever Given could take weeks.
  • CDC data shows 47.4 million Americans have now been fully vaccinated against the coronavirus, with more than 133.3million doses administered as of Thursday.
  • U.S. equity futures suggest a modestly firmer open on Wall Street ahead of personal consumption data at 8:30 am Eastern time.

U.S. equity futures extended gains Friday, with traders also eying another leg up in Treasury bonds yields, as the divergence between America's accelerating post-pandemic recovery and Europe's uneven response to a spring surge in infections continues to boost domestic assets. 

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, bumped 0.3% higher in overnight trading to an early November high of 92.847, illustrating foreign appetite for domestic stocks and bonds amid a vaccine rollout that President Joe Biden vowed would reach 200 million citizens by the middle of May. 

The dollar's gains, however, are also coming in parallel with a jump in Treasury bond yields, with benchmark 10-year notes rising to 1.68% in early New York trading following yesterday's disappointing auction of $62 billion in 7-year notes and data showing the lowest number of weekly jobless applications in more than a year. 

Oil and commodity prices may offset the rise in yields and provide an early boost for the Dow Jones Industrial Average, with U.S. crude rising $1.66 per barrel to just over $60 as the Suez Canal remains blocked by the grounded Ever Given, extending a trade-damaging snarl in the world's most important trade waterway. 

Futures contracts tied to the Dow indicate a 135 point opening bell gain, while those linked to the S&P 500 are priced for a 5 point advance for the broader benchmark. 

The tech-focused Nasdaq Composite index is looking at a modest 70 point opening bell dip, with traders eyeing 10-year note yields heading into the start of the Friday session.

In Europe, energy and commodity prices boosted export stocks, which also found extra gains from a weaker euro and a stronger-than-expected reading of business sentiment from the closely-watch Ifo Institute in Germany, the region's largest economy.

The Stoxx 600 was marked 0.7% higher in the opening hours of trading, paced by a 0.8% gain for German's DAX performance index, while Britain's FTSE 100 was marked 0.75% higher in London.

Overnight in Asia, the region-wide MSCI ex-Japan benchmark caught the tailwind of last night's late-hour rally on Wall Street and rose 1.4% on the session, while Japan's Nikkei 225, heading to the end of its fiscal year on March 31, rose 1.56% to close at 29,176.70 points.