Dow futures +0.05% at 33111
S&P futures -0.4% at 3954
Nasdaq futures -0.8% at 12865
FTSE -0.1% at 6735
Dax +0.5% at 14918
Euro Stoxx +0.4% at 3901
Rising yields drag on tech
US stocks are pointing to a mixed start a as US treasury yields jump higher and the reflation trade is back on track.
Vaccine optimism and the prospect of a huge infrastructure stimulus package has boosted US treasury yields to 1.76% at the time of writing.
US President Biden announced that 90% of the US adult population will be eligible for a covid vaccine by April 19th. The quicker the population is vaccinated, the sooner the economy can reopen.
In addition to a faster vaccine rollout, an infrastructure spend of between $3 - $4 trillion is set to be laid out tomorrow, boosting expectations of a quicker recovery.
On the back of surging yields value stocks are in favour with the Dow set to open higher, whilst high growth tech stocks and the Nasdaq point lower on valuation concerns.
Non-yielding gold has dropped through key support at 1700 and trades at multi month lows.
Analyst Fiona Cincotta looks at the price action of Gold here and levels to watch here.
The Banks are likely to be in focus again amid the continued fallout from the Archegos liquidation. The likes of Goldman Sachs and Morgan Stanley may face serious questions from the SEC over how they aided Archegos get round rules regarding the disclosure of major positions.
Discovery & ViacomCBS trade +1.6% & 2.4% pre-market respectively recovering from previous heavy losses after Archegos Capital hedge fund was forced to liquidate its positions.
Stocks in focus
Chewy – is due to report after the close. The online pet supplies provider performed well across the pandemic which is expected to be reflected in quarterly results today. Q4 loss per share of $0.10, up 33% YoY is expected. Sales are expected to have risen 45% to $1.96 billion
Lululemon – is due to report after the close. The results come after the stock reported a 50% rally in its share price last year. Expectations are running high with Q4 EPS expected at $2.49, up 9.2% YoY, on revenue of $1.66 billion, up 18.9%.
Where next for Lululemon share price?
After rallying hard across last year, the bullish momentum ran out of steam in the final quarter of 2020 and the share price has been trending lower since. Lululemon trades below its 50 sma and its decseding trendline dating back to mid December.
The price found support at 300 and has been relatively range bound between 300 and 320 across recent weeks ahead of the results. Upbeat numbers could see a breakout beyond 320 above the descending trendline and towards 345. Any disappointment in the numbers could sdee a break below 300 towards 270 the yearly low.
FX – US Dollar trades at 4 month highs
The US Dollar is bounding higher supported by rising yields. The accelerating vaccine programme and prospect of further stimulus is boosting yields and lifting the greenback.
EUR/USD – trades under pressure despite upbeat economic sentiment data. Growing concerns over the third wave of covid sweeping the region and tighter lockdown restrictions drag on the Euro. The divergence of the outlook for Europe compared to the US is pulling the pair lower.
GBP/USD -0.170.25% at 1.3739
EUR/USD trades -0.27% at 1.1733
Analyst Fiona Cincotta looks at the price action of EUR/USD and levels to watch here
Oil slips on demand concerns
With traffic resuming along the Suez Canal oil markets are once again under pressure amid rising covid concerns in Europe and other key developing markets.
With France mulling over tighter lockdown restriction and high frequency data from India showing falling mobility as new daily infections remain elevated around 60,000 demand outlook concerns are dragging on oil.
The strong US Dollar is adding pressure to the
The only reason that the price of oil isn’t dropping further is because oil trades broadly expect OPEC to keep oil production cuts in place in April.
Attention will now turn towards the API stockpiles data due later today.
US crude trades -1.8% at $60.46
Brent trades -1.5% at $63.97
14:00 US Consumer confidence
20:30 API Weekly crude oil stocks