Stock Futures Struggling as Bond Yields Continue Climb

The 10-year Treasury yield rose to its highest level since January 2020

Digital Content Manager
Mar 18, 2021 at 9:15 AM
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Stock futures are cutting last night's gains as investors nervously eye spiking interest rates. Specifically the 10-year Treasury yield, which rose 10 basis points to clock its highest level since January 2020, at 1.74%. Futures on the Dow Jones Industrial Average (DJI) and S&P 500 Index (SPX) are drawing back from the record highs hit during Wednesday's session, while the Nasdaq-100 Index (NDX) is eyeing another triple-digit drop. 

This week's jobless claims data isn't doing markets any favors. Last week, first-time unemployment claims rose to 770,000, well above the 700,000 expected by economists. Wall Street is also eyeing Fed Chair Jerome Powell's comments yesterday afternoon, in which the central bank leader assured investors that there would be no interest rate hikes until at least 2023. 

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

  • This auto stock could be an interesting play for option bulls. 
  • Micron attracted plenty of attention after announcing plans to sell one of its factories. 
  • Plus, Petco's first earnings report since going public; Apple's newest iPad release; and Dollar General makes pessimistic prediction. 

futures chart march 18

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.53 million call contracts traded on Wednesday, and 672,104 put contracts. The single-session equity put/call ratio rose to 0.44 and the 21-day moving average rose to 0.46.
  2. Petco Health and Wellness Company Inc (NASDAQ:WOOF) just posted its debut earnings report, sharing fourth-quarter profits of 17 cents per share, topping analysts' estimates. The company's revenue also topped expectations, while its same-store sales rose 17%. Ahead of the bell, WOOF is up 5.4%. 
  3. Apple Inc (NASDAQ:AAPL) will release its new series of iPads as early as April, according to a report from Bloomberg. The stock is slipping though, thanks to big tech's deep selloff. The equity is down 1.4% in pre-market trading. 
  4. Dollar General Corp. (NYSE:DG) is struggling ahead of the open, down 4.7%, after the company's fourth-quarter earnings and revenue missed expectations. The discount retailer also warned that there could be a drop in sales as the heavy demand the company enjoyed during the pandemic slows down. 
  5. Today, the Philadelphia Fed Manufacturing Index, and initial and continuing jobless claims are due out. 

OV Buzz Chart March 18

Asian, European Markets Respond Favorably to Fed Decision

Stocks in Asia were higher on Thursday, after investors applauded the U.S. Federal Reserve’s decision to keep short-term borrowing rates near zero. In addition, the central bank upped economic growth expectations, and said no interest rate hikes would occur through 2023. In response, Hong Kong’s Hang Seng added 1.3%, followed by Japan’s Nikkei, which ended the day 1% higher. Rounding out the region, South Korea’s Kospi and China’s Shanghai Composite tacked on 0.6% and 0.5%, respectively.

Also responding positively to the Fed’s decision are European markets, which are mostly higher this afternoon. The Bank of England (BoE) meets today, but no policy change is expected. Elsewhere, the European Medicines Agency (EMA)  is conducting a safety review of the vaccine developed by AstraZeneca (AZN) and the University of Oxford. In turn, Germany’s DAX earlier rallied to a record high and was last seen up 0.8%, while the France CAC 40 is up 0.06%, and the London FTSE 100 is down 0.2%.

 

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