Stock Futures Pivot Lower as Bond Yields Climb

The 10-Year Treasury yield is overshadowing JNJ's vaccine approval by the FDA

Deputy Editor
Feb 24, 2021 at 9:15 AM
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Futures on the Dow Jones Industrial Average (DJI)S&P 500 Index (SPX), and Nasdaq-100 Index (NDX) are modestly in the red, following yesterday's volatile session in which the SPX snapped a five-day losing streak. This morning, Wall Street cheered a new coronavirus vaccine update, as Johnson & Johnson's (JNJ) single-shot vaccine was approved by the Food and Drug Administration (FDA) for emergency use. However, overshadowing the vaccine news so far is the continued rise of bond yields, with the 10-year Treasury yield pushing above 1.42% and fueling concerns over risk assets.

Continue reading for more on today's market, including:

  • Right on cue, a breakdown of the rising 10-Year Treasury yield, with Schaeffer's Senior Quantitative Analyst Rocky White. 
  • Options bulls target outperforming SONO amid dip. 
  • Plus, SQ joins bitcoin buzz; GameStop CFO resigns; Lowe's stock rises on an earnings beat. 

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5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 2.1 million call contracts traded on Tuesday, and 953,352 put contracts. The single-session equity put/call ratio rose to 0.44 and the 21-day moving average rose to 0.42.
  2. Square Inc (NYSE:SQ) stock is down 3.6% ahead of the bell, despite the payments processor reporting better-than-expected fourth-quarter earnings and revenue. In further news, the company announced it had bought $170 million in bitcoin. To follow, no fewer than 14 analysts raised their price targets on SQ. 
  3. The shares of GameStop Corp (NYSE:GME) are down 2.2% in electronic trading, after reports that the video game retailer's Chief Financial Officer Jim Bell will step down in March. The company stated that the resignation was separate from the recent wild stock movement. Year-to-date, the stock is up 138.7% coming into today.
  4. Lowe's Companies Inc (NYSE:LOW) is up 2.2% ahead of the open this morning, after the home improvement company reported better-than-expected fourth-quarter earnings and revenue. Looking to recoup yesterday's sharp losses, LOW is up around 5% year-to-date before the bell. 
  5. Today's economic data will feature new home sales.   

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Stocks in Asia Brush Off Financial Boost

Asian markets were mostly lower on Wednesday, as investors grew more tepid despite U.S. Fed Chair Jerome Powell’s testimony before Congress, which eased inflation fears and reinforced a commitment to the current economic policy. They also brushed off news that the Hong Kong government will spend more than $15 billion over the next financial year to boost its struggling economy. Regardless, Hong Kong’s Hang Seng and China’s Shanghai Composite fell 3% and 2%, respectively. Elsewhere, South Korea’s Kospi dropped 2.5%, while Japan’s Nikkei was 1.6% lower.

Meanwhile, European markets are higher, with Powell’s comments and upbeat German data boosting investor sentiment. More specifically, Germany’s economy saw better-than-expected growth for the last quarter of 2020, with exports and construction activity leading to a 0.3% jump in gross domestic product (GDP). Earnings were also top of mind, with reports from giants such as Accor and Lloyds rolling in. At last check, the German DAX is up 0.8%, while London’s FTSE 100 has added 0.2%, and France’s CAC 40 is 0.1% higher.

 

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