The Tuesday Market Minute
- Global stocks trade higher as bond yields ease and investors shift focus to bets on a stronger-than-expected post pandemic recovery.
- Nasdaq futures leap 240 points higher as tech looks to rebound from its Monday slump into correction territory.
- Benchmark 10-year Treasury bond yields ease to 1.523% ahead of a $58 billion auction of 3-year notes.
- CDC data shows 92.1 million coronavirus vaccine doses have been administered as of yesterday, a pace of more than 2.5 million per day against a new case rate of around 50,000.
- U.S. equity futures suggest a firmer open on Wall Street ahead of rebook retail sales data at 8:55 am Eastern time.
U.S. equity futures traded firmly higher Tuesday, while tech stocks rebounded from their recent slump into correction territory, as bond yields eased and investors shifted focused to a global pandemic recovery story powered by President Joe Biden's $1.9 trillion COIVD relief bill.
Benchmark 10-year U.S. Treasury bond yields fell by around 7 basis points from yesterday's levels to trade at 1.523% ahead of an auction of 3-year notes later this morning, giving stock markets a chance to regroup some of yesterday's losses, especially in tech, where the Nasdaq Composite now sits in technical 'correction' territory, defined as a 10% decline from its most recent peak.
Beaten-down tech giants such as Apple (AAPL) - Get Report and Tesla (TSLA) - Get Report, which have lead markets into the red for the past two weeks, were marked sharply higher in pre-market trading Tuesday, alongside industrial bellwethers such as General Electric (GE) - Get Report and carmaker Ford Motor Co. (F) - Get Report.
The broader macro landscape, however, has hardly changed since Monday, with investors still betting on a stronger-than-expected post-pandemic turnaround fueled by Biden's COVID relief bill, which is likely to clear Congress later this week, and an accelerating vaccine program that has put jabs in the arms of more than 92 million Americans as of March 9.
The pullback in Treasury yields, however, alongside a pullback for the U.S. dollar, is allowing for another push higher in stocks, with futures contracts tied to the Dow Jones Industrial Average priced for a 105 point opening bell gain and those linked to the S&P 500 indicating a 33 point advance at the start of trading.
Nasdaq Composite contracts, meanwhile, are suggesting a solid 250 point opening bell surge. paced by a 2.2% gain for Apple and a 4.35% rebound for Tesla. Advanced Micro Devices (AMD) - Get Report shares were marked 3.6% higher at $76.60 while Microsoft (MSFT) - Get Report jumped 2% to $232.00 each.
Stocks in Europe, as well, were able to ride the tailwind of re-opening hopes and softer government bond yields, with the Stoxx 600 rising 0.4% in early trading and Germany's trade-sensitive DAX performance index extending gains from yesterday's all-time high following stronger-than-expected export data for the month of February for the region's biggest economy.
In Asia, however, markets were mixed following yet another down day for stocks in China, where speculation of state-backed buying of equity funds failed to keep markets in the green amid the first of two phases of the annual gathering of the nation's political elite in Beijing.
The Shanghai Composite closed 1.8% lower, while the tech-focused CSI 300 slumped 2.15%, holding the region-wide MSCI ex-Japan index down to a modest 0.1% gain for the session. Japan's Nikkei 225 rose 1% to close at 29,027.94 points.
Elsewhere, global oil prices turned higher again Tuesday as the U.S. dollar retreated against a basket of its currency market peers and traders gobbled up cheap crude contracts following Monday's surprise declines.
WTI contracts for April delivery were marked 81 cents higher at $65.86 per barrel, the highest since October 2018, while Brent crude contracts for May delivery rose $1 to edge closer to the $70 threshold at $69.27 per barrel.