The S&P 500 futures trade seven points, or 0.2%, below fair value as Treasury yields continue to push higher amid inflation and rate-hike expectations.
Presently, the 2-yr yield is up another four basis points to 2.49% while the 10-yr yield is up another three basis points to 2.86%. The rapid rise in the 10-yr yield, which is now up 135 basis points this year, continues to pressure the growth stocks in pre-market action.
The bank stocks, though, appear to be drawing support from the higher interest-rate environment, as well as an earnings beat from Bank of America ( BAC 38.09, +0.52, +1.5%). The SPDR S&P Bank ETF ( KBE 50.00, +0.63) is up 1.3% ahead of the open.
On a related note, this week will be a busy week in earnings, featuring results from seven Dow components, Tesla ( TSLA 992.50, +7.50, +0.8%), and Netflix ( NFLX 340.00, -1.13, -0.3%).
Separately, today’s economic data will be limited to the NAHB Housing Market Index for April (Briefing.com consensus 77), which will be released at 10:00 a.m. ET.
Elsewhere, WTI crude futures remain elevated above $107.00/bbl ($107.05, +0.10, +0.1%), even as more areas in China tightened COVID restrictions, while the U.S. Dollar Index remains above 100.00 (100.60, +0.28, +0.3%).
In U.S. Corporate news:
- Bank of America (BAC 38.09, +0.52): +1.5% after beating EPS estimates.
- BNY Mellon (BK 47.65, +0.36): +0.8% after reporting in-line Q1 results.
- Twitter (TWTR 47.09, +2.01): +4.5% after adopting a limited duration shareholder rights plan in response to Elon Musk’s takeover bid. In addition, Thoma Bravo is mulling a bid for Twitter while Elon is considering partnering with others to bid for the company, according to the NY Post .
- Natus Medical (NTUS 33.20, +7.15): +27.5% after agreeing to be acquired by ArchiMed Group for approximately $1.2 billion, or $33.50/share, in cash.
Reviewing overnight developments:
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Equity indices in the Asia-Pacific region began the week on a mostly lower note while markets in Hong Kong and New Zealand remained closed for Easter. Japan’s Nikkei: -1.1% Hong Kong’s Hang Seng: CLOSED China’s Shanghai Composite: -0.5% India’s Sensex: -2.0% South Korea’s Kospi: -0.1% Australia’s ASX All Ordinaries: +0.7%.
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In economic data:
- China’s Q1 GDP 1.3% qtr/qtr (expected 0.6%; last 1.6%); 4.8% yr/yr (expected 4.4%; last 4.0%). March Retail Sales -3.5% yr/yr (expected -1.6%; last 6.7%), March Fixed Asset Investment 9.3% yr/yr (expected 8.5%; last 12.2%), and March Industrial Production 5.0% yr/yr (expected 4.5%; last 7.5%). March Unemployment Rate 5.8% (expected 5.5%; last 5.5%)
- India’s March WPI Inflation 14.55% yr/yr (expected 13.00%; last 13.11%)
- Singapore’s March trade surplus SGD4.17 bln (last surplus of SGD8.29 bln). March non-oil exports 7.7% yr/yr (expected 2.9%; last 9.4%)
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In news:
- The People’s Bank of China announced that the reserve requirement ratio will be cut by 25 bps while some smaller banks will see an additional 25 bps cut.
- There was also growing speculation that the People’s Bank of China will make small cuts to its one-year and five-year loan prime rates on Wednesday.
- Japanese convenience store chain Lawson will raise the price of chicken nuggets for the first time in 36 years.
- Yonhap reported that Hyundai Research Institute lowered its forecast for South Korean growth in 2022 to 2.6% from 2.8%.
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Equity markets in Europe are closed for Easter Monday.
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In economic data:
- Spain’s February trade deficit EUR4.30 bln (last deficit of EUR6.50 bln)
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In news:
- British employers are reportedly offering pay raises well below the inflation rate.
- Italy’s Prime Minister Draghi claimed that Europe can reduce its energy purchases from Russia quicker than previously estimated.
- The European Commission is reportedly preparing a sixth set of sanctions against Russia.
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U.S. equity futures:
- S&P 500 Futures: -12 @ 4,381
- DJIA Futures: -47 @ 34,404
- Nasdaq 100 Futures: -53 @ 13,840
Overseas:
- Europe: DAX CLOSED, FTSE CLOSED, CAC CLOSED
- Asia: Nikkei -1.1%, Hang Seng CLOSED, Shanghai Composite -0.5%
Commodities:
- Crude Oil -0.07 @ 106.31
- Nat Gas +2.50 @ 7.550
- Gold +18.60 @ 1993.50
- Silver +0.545 @ 26.245
- Copper +0.0375 @ 4.7610