Tuesday March 29th


Stock futures rise as Dow and S&P 500 aim for 4-day winning streak

rose Tuesday morning, putting the major averages on track to build on the previous session’s gains. Futures on the Dow Jones Industrial Average rose 287 points, or 0.8%. S&P 500 futures were up 0.8%, while Nasdaq 100 futures climbed 1.1%. Growing hope for a Russia-Ukraine ceasefire appeared to help investor sentiment on Tuesday morning. The price of U.S. benchmark West Texas Intermediate crude, which spiked during the invasion, fell more than 4% to $100 per barrel. To be sure, both sides have said they are not close to reaching a deal. Ahead of the negotiations in Turkey, Ukrainian Foreign Minister Dmytro Kuleba said on that “nothing is agreed upon unless everything is agreed upon.” Meanwhile, the U.K. warned that Russian troops still pose a “significant threat” to the Ukrainian capital of Kyiv, noting that Russia is reorganizing its forces. The Dow and S&P 500 are each coming off three straight positive sessions. The S&P 500 has now rebounded more than 9% since March 14. “It’s not quite lipstick on a pig but this move does take some of the sting off of what has been a weak Q1 for equities. ... The question for stocks as an asset class is whether the improvement seen in March was a bounce of impressive degree but limited duration, or the beginning of an extended rally that could carry the indexes to new highs,” Willie Delwiche, investment strategist at All Star Charts, said in a note to clients. In fixed income, the 5-year Treasury note rose above the 30-year on Monday and held there on Tuesday, marking the first inversion since 2006. The shift stoked some recession fears, although economists typically watch the spread between the 2-year and 10-year rate, which remains positive. “Our base case is that the US economy can avoid a recession, lowering the threat of a sustained downtrend in stocks. As such, investors should brace for higher rates—including potentially adding exposure to value and financial stocks which tend to outperform as central bank policy tightens—without overreacting by exiting equity markets,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note to clients. In corporate news, shares of FedEx rose more than 2% in premarket trading after the company announced that founder Fred Smith would step down as CEO on June 1 and be replaced internally. Health care giant UnitedHealth Group announced a deal to buy LHC Group for $170 per share, sending the smaller company’s stock up 7%. Consumer confidence and home price data to be released Tuesday, ahead of Friday’s monthly jobs report. Economists expect to see 460,000 jobs added in March and the unemployment rate to fall to 3.7%, according to Dow Jones estimates. Stocks across Asia-Pacific rose, following a tumble in oil prices overnight. Bitcoin meanwhile surged past a key level, and the yen’s sharp decline sparked alarm. Hong Kong’s Hang Seng index jumped 0.91% in the last hour of trade, as casino and tech stocks rose. Mainland China shed earlier gains, with the Shanghai composite inching down 0.33% to close at 3,203.94, while the Shenzhen component slid 0.46% to 11,895.08. Japan’s Nikkei 225 closed 1.10% higher to 28,252.42, while the Topix rose 0.93% to 1,991.66. South Korea’s Kospi was up 0.42% to close at 2,741.07. Oil prices dropped on Tuesday, extending losses from the previous day after Russia called peace talks with Ukraine constructive and China’s new lockdowns to curb the spread of the coronavirus hit fuel demand. Brent crude fell $4.55, or 4%, to $107.93 a barrel, and U.S. West Texas Intermediate (WTI) crude was down $4.64, or 4.4%, at $101.32. Both benchmarks lost about 7% on Monday. Gold prices fell to a near two-week low on Tuesday as elevated U.S. Treasury yields continued to impede zero-yield bullion’s appeal, with investors also tracking key talks between Russia and Ukraine. Spot gold had dipped 0.5% to $1,914.52 per ounce, touching $1,908.91, its lowest since March 16, earlier in the session. U.S. gold futures dropped 1.5% to $1,910.10.