US stocks dip as yields rise on Biden’s spending plan and pace of economic recovery

nyse open floor traders mask.JPG

US stocks were slightly lower at the open on Tuesday and bond yields rose as investors awaited President Joe Biden’s spending plan and continued to assess the fallout from the Archegos Capital Management implosion.

The 10-year Treasury yield continued its march higher, rising by 5 basis points, to 1.77%, its highest in 14 months, since the start of the pandemic just over a year ago.

“We believe the recent rise in nominal government bond yields, led by real yields, is justified and reflects markets awakening to positive developments on the faster-than-expected activity restart combined with historically large fiscal stimulus – all helped by a ramp-up in vaccinations in the U.S.,” a team of strategists from the BlackRock Investment Institute said.

Biden is expected to deliver a speech on infrastructure spending on Wednesday. The plan could include as much as $4 trillion in new outgoings and more than $3 trillion in tax hikes, sources told The Washington Post.

Here’s where US indexes stood after the 9:30 a.m. ET open on Tuesday:

Bitcoin rose above $59,000 as PayPal announced it would allow US consumers to use their cryptocurrency holdings to pay at millions of its online merchants. Bitcoin has added nearly $8,000 to its price in the past week.

West Texas Intermediate crude fell by 1.6%, to $60.55 per barrel. Brent crude, oil’s international benchmark, was down 1.35% to $64.11 per barrel.

Gold dropped 1.5%, to $1,687.40 per ounce.

Read the original article on Business Insider

US stocks rise as recovery optimism grows after new vaccine pledge from Biden

trader Gregory Rowe
NYSE trader Gregory Rowe works on the floor of the New York Stock Exchange at the end of the trading day.

  • US stocks opened mostly higher on Friday, buoyed by optimism over President Joe Biden’s new vaccine pledge.
  • Investors’ risk appetite returned as increased vaccine momentum points to a wider economic reopening by the summer.
  • Oil prices edged higher following news that it could take weeks to dislodged the container ship blocking the Suez Canal.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell

US stocks opened mostly higher on Friday, buoyed by optimism over President Joe Biden’s new goal of administering 200 million COVID-19 vaccine doses by his 100th day in office, doubling the original goal of 100 million doses.

Thus far, 25.7% or 85 million Americans have received at least one dose of the vaccine and 14% or 46.3 million have received two doses.

Investors’ risk appetite returned on Friday as a steady vaccine rollout would signal the economy could be on its way to a wider reopening by the summer.

Bank shares also rose on Friday after the Federal Reserve announced that banks can raise dividends and resume share repurchases after June 30.

On Thursday, US stocks closed higher after weekly jobless claims hit 684,000 their lowest levels since the pandemic began last year.

“We will very gradually over time and with great transparency when the economy has all but fully recovered, we will be pulling back the support that we provided during emergency times,” Powell told NPR Thursday.

Here’s where US indexes stood at the 9:30 a.m. ET open on Friday:

Goldman Sachs analysts on Friday said they remain bullish on US stocks, predicting a 10% increase in the S&P 500 from current levels over the next 12 months. The analysts also said they are positive about “procyclical” and non-US stocks, which are poised to benefit from global growth.

Cathie Wood’s ARK Autonomous Technology & Robotics ETF recently bought 800,494 shares in Jaws Spitfire Acquisition Corp, a SPAC backed by tennis champion Serena Williams. Among the fund’s biggest holdings are Tesla, JD.com, Baidu, and Alphabet.

Nio fell 8% after it said it will temporarily halt production at its JAC-NIO manufacturing plant in Hefei, China for five working days

Bitcoin climbed back above the $51,000-level it was on Thursday evening to $53,029. Traders are bracing themselves ahead of the record $6 billion bitcoin options set to expire Friday.

“The expiry data suggests a bullish outlook,” said Pankaj Balani, CEO at Delta Exchange. “Currently, Delta Exchange is seeing bullish price signs for bitcoin and this is based on the March futures pricing.”

Oil prices edged higher, rebounding from Thursday’s fall, following news that it could take weeks for experts to dislodged the massive 220,000-ton container ship blocking the Suez Canal.

JPMorgan’s chief global strategist Marko Kolanovic on Thursday said if this situation is not resolved soon, investors and consumers can expect shipping rates to soar, energy commodities to further increase, and global inflation to continue to rise.

He did add that these risks can be hedged by buying oil and associated equities such as energy and shipping.

The Suez Canal, the second-biggest shipping channel in the world, is a key shipping route for crude and refined products, connecting Europe to Asia and has wreaked havoc on global maritime trade.

West Texas Intermediate crude climbed as much as 2.82%, to $60.21 per barrel. Brent crude, oil’s international benchmark, also rose by 2.55%, to $63.53 per barrel. Both benchmarks are on track for weekly losses.

Gold slipped 0.55% to $1,725.12 per ounce.

Read the original article on Business Insider

Tech stocks rebound as Treasury yields stabilize amid inflation fears

nyse surprised trader
  • Tech stocks staged a rebound on Friday amid stabilizing Treasury yields after a sharp sell-off the previous day.
  • On Friday morning an announcement from the Federal Reserve regarding bank capital rules sent the 10-year yield higher and banks stocks lower.
  • Yields rose this week as investors grew concerned that the stimulus will cause a rise in inflation.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Tech stocks rebounded Friday after a sharp-sell off the previous day as Treasury yields stabilized.

Earlier on Friday, the Fed announced that its temporary pandemic-era rule that relaxed bank capital requirements will not be extended after March 31. That offset the positive effect of stabilizing bond yields, which then spiked on the news.

Bond yields have risen as investors grow concerned that the $1.9 trillion fiscal stimulus will cause a rise in inflation, leading the Federal Reserve to change policy and raise rates sooner than expected.

But some on Wall Street aren’t concerned about the 10-year rising for much longer. JPMorgan’s Marko Kolanovic expects yields to stabilize, pushing tech stocks higher and helping the S&P 500 finish the year at 4,400, a 12% gain from current levels.

Here’s where US indexes stood after the 4 p.m. close on Friday:

The Fed’s decision to let the bank capital requirement rule expire sent bank stocks lower on Friday. Shares of JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup all ended in the red.

Shares of Visa slipped as much as 6% on Friday after a report said the Department of Justice is investigating the firm’s debit-card practices. Visa is under investigation for “anticompetitive practices” in the debit-card market, reported the Wall Street Journal, citing unnamed sources.

Oil prices rose after tumbling 7% on Thursday. West Texas Intermediate crude rose as much as 2.9%, to $61.72 per barrel. Brent crude, oil’s international benchmark, rose 2.6%, to $64.95 per barrel, at intraday highs.

Gold jumped as much as 0.5%, to $1,745.47 per ounce.

Read the original article on Business Insider

US stocks fall as traders digest the Fed’s decision to let capital break for banks expire

Traders work on the floor of the New York Stock Exchange (NYSE) on November 20, 2019 in New York City
Traders work on the floor of the New York Stock Exchange (NYSE) on November 20, 2019 in New York City

  • US stocks fell on Friday morning, extending a sharp sell-off the day before.
  • The spiking bond yields that have driven stocks lower cooled initially, with the 10-year Treasury yield retreating from a 14-month high.
  • Bank stocks then dipped and the 10-year surged after the Fed announced it will not extend a pandemic-era rule that allowed banks to maintain lower amounts of capital.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks fell on Friday after the Fed announced that its temporary pandemic-era rule that relaxed bank capital requirements will not be extended after March 31. That offset the positive effect of stabilizing bond yields, which then spiked on the news.

Bond yields have risen as investors grow concerned that the $1.9 trillion fiscal stimulus will cause a rise in inflation, leading the Federal Reserve to change policy and raise rates sooner than expected.

Chetan Ahya – Morgan Stanley’s chief economist – is concerned that a rapid labor-market recovery could push inflation levels to spike and breach the Fed’s 2.5% inflation “tolerance threshold” as soon as 2022. That could bring a “disruptive shift in expectations for Fed tightening,” and lead to heightened stock market volatility down the road, he said on a recent podcast.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Friday:

Elsewhere, Fed Chair Jerome Powell said that central bank digital currencies must coexist with cash and other forms of money. The pandemic has highlighted the limitations of the current payment system, but collaboration is required to improve it, he said.

Oil prices extended losses after tumbling 7% on Thursday as investors second-guessed the recent rally and reacted to the slow rollout of coronavirus vaccines in Europe that could dent demand growth. West Texas Intermediate crude fell as much as 1.6%, to $59.06 per barrel. Brent crude, oil’s international benchmark, fell by 1.6%, to $62.24 per barrel, at intraday lows.

Gold jumped slid as much as 0.5%, to $1,728.57 per ounce.

Read the original article on Business Insider

Oil prices whipsaw as traders digest attack on Saudi oil terminal

saudi aramco plant
A view shows Saudi Aramco’s Wasit Gas Plant, Saudi Arabia in 2014.

  • Brent oil, the international benchmark, surged above $70 for the first time in more than a year. 
  • Saudi Arabia said it intercepted drone and missile attacks aimed against its facilities. 
  • Yemen’s Houthi rebels reportedly claimed they hit the facilities they targeted in Saudi Arabia.
  • Visit the Business section of Insider for more stories.

Oil prices shot up past $70 for the first time in more than a year after key facilities in Saudi Arabia came under a missile and drone attack Sunday.

Saudi Arabia said the attacks were intercepted, with an attempted drone strike aimed at one of the petroleum tank farms in the Ras Tanura port while a ballistic missile targeted Saudi Aramco facilities in Dharan, according to the Saudi Press Agency

Brent oil, oil’s international benchmark, climbed to an intraday high of $71.38 per barrel as it packed on more than 2% from Friday’s settlement. Brent oil hadn’t traded above $70 since January 2020. The price on Monday eventually turned lower, losing 0.2% at $69.24.

The West Texas Intermediate continuous oil contract reached as high as $67.26 before pulling back. It was off $0.02 at $65.43.

Yemen’s Houthi rebels on Sunday claimed they hit facilities in Ras Tanura, according to the Washington Post. A coalition led by Saudi Arabia has been fighting against the rebels backed by Iran since 2015.

“The Ministry of Defense will undertake all necessary, deterrent measures to safeguard its national assets in a manner that preserves the security of global energy,” said Brigadier General Turki Al-Malki of Saudi Arabia’s defense ministry in a statement.

Oil prices climbed last week after the Organization of the Petroleum Exporting Countries and its allies agreed to keep production cuts intact through April, a decision made as a recovery in the market is still taking shape while the COVID-19 pandemic persists.

Read the original article on Business Insider

Tech stocks tumble as investors balk at lofty valuations

Traders work on the floor of the New York Stock Exchange (NYSE) on November 20, 2019 in New York City
Traders work on the floor of the New York Stock Exchange (NYSE) on November 20, 2019 in New York City


US stocks were mixed on Monday with tech stocks pulling back over valuation concerns while investors weighed what rising yields could mean for inflation.

Fundstrat’s Thomas Lee says the case for cyclical stocks within energy, industrials, consumer discretionary, materials, and financials is strengthening as coronavirus cases fall and the US economy begins to re-open.

US lawmakers will debate on President Joe Biden’s proposed $1.9 trillion American Rescue Plan act this week. Also, Federal Reserve chairman Jerome Powell will deliver testimony to the Senate Banking and House Financial Services Committees

Here’s where US indexes stood at the 4 p.m. ET close on Monday:

Shares of Churchill Capital IV spiked as much as 19% on Monday after a Bloomberg report said a merger with the electric-vehicle maker Lucid Motors could come as soon as Tuesday. The report follows weeks of rumors that special-purpose acquisition company Churchill would merge with Lucid. 

Famed Reddit trader Keith Gill has increased his stake in GameStop, according to a screenshot he posted to Reddit on Friday. Gill, who goes by Roaring Kitty on YouTube and Twitter and DeepF—ingValue on Reddit, now owns 100,000 shares of the video-game retailer, representing a double of his previous common share stake of 50,000 shares. 

General Electric gained as much as 5.6% on Monday but Goldman Sachs predicts the stock could jump roughly 20% to $15 per share. Analysts from the firm sat down with GE executives on Friday to discuss the company’s operations and financials. The analysts came away “encouraged” by free cash flow and power business momentum at the company.

Bitcoin tumbled as much as 17% on Monday after hitting a record above $58,000 over the weekend, though Bitfinex CTO Paolo Ardoino says daily price movements are “more of a sideshow.”

“Today’s price movement may galvanize bitcoin’s many critics, including those who recently dismissed the leading cryptocurrency as an economic sideshow. Such criticism misses the point and the profound impact it is starting to have. For many of the battle-tested exchanges that have weathered the market fluctuations, volatility isn’t new and is to be expected in such a young market. For many in the industry, development and deployment is priority,” Ardoino said on Monday.

Oil prices spiked. West Texas Intermediate crude rose as much as 4.14%, to $61.69 per barrel. Brent crude, oil’s international benchmark, jumped 3.7%, to $65.24 per barrel.

Gold rose 1.75% to $1,808.60 per ounce, at intraday highs.

Read the original article on Business Insider

US stocks fall as investors mull how stimulus will impact inflation

NYSE Trader Blur
Traders on the floor react before the opening bell on the New York Stock Exchange on March 9, 2020 in New York.


US stocks fell Monday morning as investors remained cautious that a large federal stimulus, coupled with surging commodity prices and rising government bond yields could lead to a rise in inflation, just as the world economy is starting to bounce back from the coronavirus pandemic. 

The yield on the benchmark 10-year US Treasury note is around 1.37%, its highest in a year, having doubled in the space of six months. 

“Near-term Treasury bond prices are likely to remain under pressure as yields rise in anticipation of the economic re-openings that lie ahead. That said, in our experience the bond market has been known to project its expectations for inflation well beyond levels that are justified by the trends in the actual inflation rate,” said John Stoltzfus Oppenheimer Asset Management chief investment strategist. 

US lawmakers will debate on President Joe Biden’s proposed $1.9 trillion American Rescue Plan act this week. Also, Federal Reserve chairman Jerome Powell will deliver testimony to the Senate Banking and House Financial Services Committees. 

Here’s where US indexes stood after the 9:30 a.m. ET open on Monday:

“Big Short” investor Michael Burry warned over the weekend that rampant speculation and widespread betting with borrowed money has driven the stock market to the brink of collapse

“Speculative stock #bubbles ultimately see the gamblers take on too much debt,” the investor tweeted, along with a chart showing the S&P 500 index and levels of margin debt both soaring in recent months. “The market is dancing on a knife’s edge,” Burry said.

Toast Inc, a cloud-based restaurant-software provider, is planning an initial public offering that could value the firm at around $20 billion, the Wall Street Journal reported.

Bitcoin fell 10% to a 24-hour low under $52,000. The drop follows Sunday’s record high of $58,330. 

Oil prices were higher. West Texas Intermediate crude increased 2.3% to $60.60 per barrel.  Brent crude, oil’s international benchmark, rose 1.75% to $64.01 per barrel.

Gold gained about 1% to $1,795.80 per ounce. 

 

Read the original article on Business Insider