The Tuesday Market Minute
- Global stocks extend gains as bond markets steady and sentiment improves amid an accelerating vaccine rollout in the United States.
- President Joe Biden pledges enough vaccine supply for every American by the end of May, while CDC data shows 78.2 million vaccine doses administered as of March 2.
- Benchmark 10-year Treasury note yields hold at 1.465% as market volatility eases.
- Eurozone PMI data suggests a double-dip recession for the world's biggest economic bloc in Q1.
- Oil jumps higher amid reports that OPEC+ members will extend production cut pact into April at tomorrow's Vienna meeting.
- U.S. equity futures suggest softer open on Wall Street following fourth-quarter earnings from Dollar Tree and a disappointing ADP February payroll report.
U.S. equity futures slipped lower Wednesday following a weaker-than-expected reading of private sector job growth, and a renewed jump in government bond yields that offset improved sentiment linked to a pledge on vaccine availability from President Joe Biden.
Futures pared earlier gains after ADP's national employment report showed an increase of 117,000 new jobs last month, well shy of the Street forecast of around 200,000. Benchmark 10-year bond yields were also creeping higher, to 1.465%, in early New York trading.
Biden told reporters late Tuesday that the U.S. will have enough vaccine supply to inoculate every American citizen by the end of May after invoking the Defense Protection Act to compel Merck & Co. (MRK) to assist Johnson & Johnson (JNJ) with its newly-approved jab.
With the U.S. administering around 1.8 million vaccine doses each day, and new cases down from 20% from the previous weeks to around 50,000 per day, investors are starting to bet on a late Spring re-opening of the broader economy that could have profound affects on jobs, growth and, potentially, consumer price inflation.
Futures contracts tied to the Dow Jones Industrial Average suggest a 15 point opening bell dip, while those linked to the S&P 500 are priced for a 5 point move to the downside.
The tech-focused Nasdaq, which bore the brunt of last week's yield moves, is set for slightly more modest 35 point slip at the start of trading as benchmark 10-year Treasury bond yields were marked at 1.465%.
Oil prices were higher in early trading amid reports that OPEC members, as well as non-cartel member allies such as Russia, will rollover their previously-agreed production cuts when they meet tomorrow in Vienna.
That speculation offset the impact of a 7.4 million barrel increase in U.S. crude supplies reported last night by the American Petroleum Institute.
WTI contracts for April delivery were marked 66 cents higher from their Tuesday close at $60.40 per barrel while Brent contracts for May delivery, the benchmark for global prices, edged 62 cents higher to $63.32 per barrel.
In Europe, stocks built solid early gains despite PMI data showing a likely double-dip recession for the world's biggest economic bloc over the first three months of the year as a slower vaccine rollout, and stubbornly high infection rates, limit the region's growth.
In Britain, the FTSE 100 added 1.14% on both the strength of commodity prices and a move by Chancellor of the Exchequer Rishi Sunak to extend furlough payments to British workers until September ahead of his semi-annual budget statement to Parliament later today.
Overnight in Asia, China stocks lead a regional rebound that lifted the MSCI ex-Japan index 1.8% heading into the final hours of trading, while a firmer yen held gains in check for the Nikkei 225 in Tokyo, which closed 0.51% higher at 29, 559.10 points.