US open: Futures mixed as stimulus approved & yields rise

Joe Biden signs $1.9 trillion stimulus package and pledges all adult Americans will be vaccinated by 1 May. Economic recovery expectations & treasury yields rise. Dow and Dollar aim higher, tech wreck resumes.

USA (2)

US futures

Dow  futures +0.2% at 32557

S&P futures -0.2% at 3927

Nasdaq futures -1.2% at 12890

In Europe

FTSE +0.1% at 6742

Dax -0.65% at 14480

Euro Stoxx -0.4% at 3828

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Biden signs off on $1.9 trillion stimulus & vaccine drive

President Biden signed off on the largest fiscal stimulus bill in US history at the same time as pledging an acceleration to the vaccine drive.

Biden promised that all Americans would have the covid vaccine by 1 May to enable to return to normal life by 4 July Independence Day.

Combined, the stimulus and the vaccination pledge are driving economic recovery expectations and inflation expectations higher once again.

US 10 year yields which had dropped below 1.5% on Wednesday are now back over 1.60% taking the shine off stocks which boosting the US Dollar.

Stocks point to a mixed open

US stocks are pointing to a mixed start. The more cyclical Dow Jones is looking to extend gains into the weekend as the drive for value intensifies. The tech heavy Nasdaq is bracing itself for a deep selloff. Rising treasury yields are once again raising questions over lofty growth stock valuation. Meanwhile the tech sector in the S&P is dragging on the index.

Stocks in focus :

Tesla -2.9% pre-market after a fire at the electric car makers factory in California. The were no injuries and the fire in now under control. However it will have set back production at a time when rivals are ramping up.

Docusign -4% pre-market despite reporting forecast beating Q4 results and an upbeat guidance. The stock has surged 200% across the past 12 months.

Where next for Docusign share price?

Despite surging 200% over the past 12 months, the rally started to lose momentum from October. The share price traded within an ascending channel which it broke out from in early March.

The stock sold off sharply as part of the broader tech rout before finding a floor at 185p.
The stocks trades below its 50 & 20 sma – a negative bias. Support can be seen at 200 round number ahead of 187.00.
Any attempt to further the recovery would need to break through 240 for more buyers to jump in.

Vaccine developments: AstraZeneca & Novavax

AstraZeneca’s share price is holding up considerably well considering that the number of countries that. The stocks trades -0.5% as more and more countries in Europe halts the use of the vaccine amid fears that it is linked to blood clotting.

Novavax +16% pre-market has reported that its covid vaccine is 96% effective in late trials against the original covid strain. It was also 86% effective against the British strain. The stock rallied over 8% in the previous session & trades firmly higher pre-market.

FX – ECB stays pat on rates, PEPP purchases to ramp up

The US Dollar is rebounding from yesterday’s selloff, tracing US treasury yields higher. DXY trades +0.4% at 91.80.

GBP/USD trades lower after data revealed UK economy contracted -2.9% in January vs 1.2% growth in December. Exports to the EU also plunged 40% in the month following Brexit.

GBP/USD trades -0.6% at 1.3903

EUR/USD trades -0.35% at 1.1929

Oil calms after jumping on Thursday

After some big swings through the week, oil is heading into the weekend approximately flat.

Oil prices jumped 2.4% on Thursday, boosted by Joe Biden signing off on the $1.9 trillion stimulus package in US and his pledge to vaccinate all American adults by the start of May. Future oil demand expectations rose in line with expectations of a much quicker US recovery.

OPEC revealed in its monthly report a downward revision in oil demand in the first half of the year, making last week’s OPEC+ group’s decision less surprising. OPEC also upwardly revised its demand estimates for H2.

Baker Hughes rig count data is due later today.

US crude trades +0.02% at $65.94

Brent trades -0.1% at $69.25

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

14:00 Canadian Jobs Data

15:00 Michigan Consumer Confidence

18:00 Baker Hughes Rig Count

Fiona Cincotta looks at the price action and levels to watch in USD/CAD

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