Global stocks rise, but U.S. stocks are set to retreat from record highs as the bond market sell-off resumes. AirBnB and DoorDash report their first quarterly earnings as public companies; jobless claims, durable goods and a revision to fourth-quarter GDP are all due.
Powell restarts the risk rally
The global risk rally resumed overnight after Federal Reserve Chairman Jerome Powell stuck to his guns, repeating in Congress that there can be no question of tightening policy in the foreseeable future.
The dollar index, which tracks the greenback against a half dozen advanced economy currencies, fell 0.5% to a seven-week low of 89.70, the sell-off accelerating during the European morning with both the euro and commodity currencies rising strongly.
That supported prices for oil and base metals, with copper futures surging again to a new 9 1/2 -year high of $4.34 a pound. The trend was also confirmed by Anglo American, one of the world’s biggest miners, reporting windfall profits in the fourth quarter.
Jobless Claims and GDP
Powell’s cautious assessment of the economic outlook will be checked against the latest weekly jobless claims data at 8:30 AM ET. They will be of more immediate interest than the revision to fourth-quarter gross domestic product numbers, which are due at the same time, along with durable goods orders for January.
The Kansas City Fed’s monthly business survey follows later in the day.
Jobless claims have stayed stubbornly high so far this year and are expected to fall only marginally to 838,000. GDP growth is expected to be revised a shade higher to 4.2% from an initial estimate of 4.0%.
U.S. tech stocks under pressure again as bonds sell off
U.S. stock markets are indicated to open mixed again, as the sell-off in bonds resumes, weighing on “long-duration” bets in the tech sector.
The yield on the benchmark 10-year U.S. Treasury note rose to a fresh one-year high of 1.45% overnight, dragging its Japanese counterpart up to its highest in over two years, and its German one up to its highest since May.
By 6:30 AM ET (1130 GMT), Dow Jones futures were up 10 points, essentially unchanged from late Wednesday, while S&P 500 futures were down 0.3% and Nasdaq futures were again clearly underperforming with a drop of 0.9%.
Two conspicuous gainers were GameStop and AMC Entertainment, both of which showed signs of a renewed ‘gamma squeeze’ on options traders on Wednesday. GameStop stock was up 56% in premarket, while AMC stock was up 17%.
AirBnB, Doordash to present first earnings
Another busy day for earnings, especially in Europe, where not everyone managed to match Anglo American’s stellar numbers.
Ab Inbev, the world’s biggest brewer, fell over 5% in Europe after warning of higher input costs and margin pressure this year, while German pharma and chemicals giant Bayer also fell sharply after reporting weaker-than-expected sales in China and cutting its dividend.
Airbnb and DoorDash will be in the spotlight after the close as they report their first quarterly figures as public companies, while the recent cold snap in Texas will add a bit of spice to updates from AES and American Electric Power before the bell.
Salesforce, Autodesk, Workday, Monster Beverage and HP all report after the close.
Oil off highs as looming OPEC+ meeting sparks caution
Crude oil prices hit their highest level since early January 2020, before the pandemic had even intruded on the world’s consciousness, riding a wave of renewed dollar weakness. However, they retraced later, amid growing caution that the recent surge in prices will lead OPEC and Russia to open the taps again when they meet next week.
The OPEC+ meeting to set output quotas for April is scheduled for March 4.
By 6:30 AM ET, U.S. crude futures were up 0.1% at $63.30 a barrel, while Brent crude futures were up 0.2% at $66.30.