US open: futures mixed as yields fall, Powell & Yellen in focus

Treasury yields ease after soothing words from Fed Powell over the weekend. Tech stocks rise, cyclicals are out of favour.

USA (2)

US futures

Dow   futures -0.03% at 32599

S&P futures +0.2% at 3917

Nasdaq   futures +0.74% at 12950

In Europe

FTSE -0.03% at 6715

Dax +0.06% at 14650

Euro Stoxx -0.01% at 3836

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Stocks set for higher start as yields ease

Tech stocks are set to outperform thanks to a fall in US bond yields, as investors buy back into growth stocks. The tech heavy Nasdaq futures are pushing ahead at the expense of the Dow and a rotation out of cyclicals.

Yields on the bench mark 10 year treasury fell -3.3% to 1.67%, well down from last week’s 14 month high of 1.75% after Fed policy makers calmed the bond market bears over the weekend. Fed Chair Powell wrote in the Wall Street journal that the recovery in the US economy is far from complete and that the Fed will continue to provide the support needed.  Richmond Fed President Thomas Barkin also said in an interview that there were no signs of undesirable inflation.

The US Dollar gave up safe haven gains in early trade and how moves lower on the yield trade.

Stocks in focus

GameStop – trades -0.6% pre-market but could see some volatility ahead of earnings later. There are questions over how much fundamentals really matter for this stocks which has been central to the populist short squeeze movement of day traders versus hedge funds.

Tesla -trades +3% pre-market after Cathie Wood’s Ark Investment said that the share price could reach $3000 by 2025. Cathie wood’s view carry weight on Wall Street.

Where next for Tesla share price?

After rallying to an all time high at the start of the year, Tesla has been trending lower. The share price found a floor at 540.00 rebounding slightly. The share price has traded range bound capped on the lower band by 615.00 and the upper band at 720.00.

Today’s jump high has pushed the share price back over the 20 sma on the daily chart. However it remains below the 50 sma and the RSI is also relatively neutral. It could be prudent to wait for a break out of the said levels before placing any aggressive buy or sell trades.

US trials boost AstraZeneca, EU vaccine crisis deepens

AstraZeneca ADRs – trades +2% pre-market after the US trial revealed that its covid vaccine was 79% effective, 100% effective in preventing hospitalization, was as effective for over 65s and didn’t increase the risk of blood clotting. This some well needed good news for the jab after European governments raised doubts over its safety.

The results come as Germany is set to join France in extending lockdown restrictions through until the middle of April amid a surge in new cases.

India has also reported its highest daily infection rate for 4 months whilst numbers in Brazil and Chile hit new records.

FX – Turkish Lira collapses

The US Dollar gave up safe haven gains in early trade and how moves lower on the yield trade.

The Turkish Lira plunged to its weakest level versus the USD on the open, tanking some 14% to 8.4836 after President Erdogan unexpectedly sacked the central bank governor Naco Agbal. The move sparked fears that Turkey could see interest rates fall again, creating further inflationary pressure.

USD/TRY has since eased back off all time highs and trades +9.7% at 7.9206.

Elsewhere the FX markets have remained relatively muted, with little in the way of fresh catalysts to direct trading.

Investors await Fed Chair Powell’s testimony before congress together with US treasury secretary Janet Yellen.

GBP/USD 0% at 1.3865

EUR/USD trades +0.2% at 1.1927

Oil turns after weaker start

US crude oil is attempting to push higher after steep losses across the previous week. Oil shed over 6%last week and opened today’s session lower amid rising concerns over a third wave of covid in Europe and tighter lockdown restrictions.

US crude trades -.1% at $61.37

Brent trades -0.3% at $64.23

Learn more about trading oil here.

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Looking ahead

13:00 Fed Powell speech

14:00 Existing home sales

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