Tuesday April 5th


Stock futures slip in early morning trading after tech-led rally

U.S. Stock index futures slipped in early morning trading Tuesday as traders continue to assess the bond market’s warning signals and the latest developments in the Ukraine. Futures on the Dow Jones Industrial Average traded 60 points lower, or 0.18%. S&P 500 futures and Nasdaq 100 futures were down more than 0.1% each. Treasury yields rose broadly Tuesday, but rates on some shorter-term bonds continued to trade above their longer-dated counterparts. The 5-year yield climbed to 2.6%, while the 30-year rate traded around 2.525%. However, the key part of the yield curve briefly uninverted Tuesday, with the 2-year yield trading marginally below its 10-year counterpart. These so-called yield curve inversions have historically preceded recessions, so they are closely watched by investors. Investors are awaiting the release of Federal Reserve meeting minutes Wednesday which could offer further clues on the central bank’s rate-hike path and the odds of a recession. Investors are also monitoring Europe, as the war between Ukraine and Russia drags on. Ukraine President Volodymyr Zelenskyy pledged to pursue allegations of war crimes against Russian forces, noting that more than 300 people were killed and tortured in a suburb near the capital of Kyiv. “Markets have been resilient given the war in Ukraine, continued price pressures, and uncertain global economic outlook, with investors’ ‘buy the dip’ mentality driving equity returns,” said Mark Hackett, Nationwide’s chief of investment research. Meanwhile, oil prices, which have shot up since the onset of the war amid concerns over supply disruptions, climbed Tuesday. West Texas Intermediate futures were up 0.9% at $104.23 per barrel. Brent crude gained 0.7% to $108.30. Those moves come after a tech-led rally that saw the Nasdaq Composite rise 1.9% on Monday. Shares of Twitter surged 27% for its best day ever after Elon Musk disclosed a 9.2% passive stake in the social media company. On Tuesday, the stock was up another 1.8%. The blue-chip Dow rose about 100 points to begin the trading week, while the S&P 500 advanced 0.8%, both posting their second straight day of gains. “In the near-term, we believe indiscriminate selling has created attractive entry points, particularly into some high-growth-potential stocks,” Tony DeSpirito, CIO of U.S. fundamental equities at BlackRock, said in a note. The new quarter has kicked off after the major averages finished their worst quarter in two years. Investors are preparing for the first-quarter corporate earnings season, which is set to begin next week. Shares in Asia-Pacific were mixed on Tuesday, while the Reserve Bank of Australia kept its cash rate target unchanged. In Japan, the Nikkei 225 climbed 0.19% to close at 27,787.98 while the Topix index shed 0.23% to 1,949.12. South Korea’s Kospi ended its trading day fractionally higher at 2,759.20. In Southeast Asia, Singapore’s Straits Times index gained 0.39%, as of 3:15 p.m. local time. Markets in Hong Kong and mainland China were closed on Tuesday for a holiday. Gold edged lower on Tuesday as higher U.S. Treasury yields and expectations of aggressive interest rate hikes by the Federal Reserve dimmed the appeal of non-yielding bullion. Spot gold was down 0.2% at $1,929.43 per ounce, as of 0933 GMT, trading in a narrow range. U.S. gold futures eased 0.1% to $1,932.