The Tuesday Market Minute
- Global stocks inch higher in cautious trading, with markets tracking political drama in Washington and noting the ongoing rise in U.S. Treasury bond yields.
- House Speak Nancy Pelosi will move forward which impeachment procedures Wednesday amid reports that VP Mike Pence will not invoke the 25th Amendment to remove President Trump from office.
- Benchmark 10-year Treasury yields rise to a fresh 10-month high of 1.156% overnight, extending the bond market sell-off that has investors focused on global interest rates.
- Bitcoin rebounds from Monday’s bear market slump, adding 9% to trade past $36,000 as crypto volatility grips markets.
- Oil nears 11-month highs ahead of EIA and API reports, with WTI crude passing $53 dollars per barrel.
- Fourth-quarter earnings reports start this week with numbers from JPMorgan, Citibank and Wells Fargo on Friday.
- U.S. equity futures suggest modest opening bell gains Tuesday ahead of Redbook retail sales data at 8:55 am Eastern time.
U.S. equity futures edged higher Tuesday, pulling global stocks out of Monday’s selloff, as markets continue to focus on political developments in Washington and a worrying rise in Treasury bond yields linked to government spending plans.
House Democrats have vowed to push forward with articles of impeachment against President Donald Trump this week following reports that suggest Vice President Mike Pence won’t move to invoke the 25th Amendment and remove him from office.
However, with only seven full days remaining until President-Elect Joe Biden’s inauguration, Trump near-term exit seems unlikely, and Democratic efforts on impeachment could stall or complicate some of Biden’s early ambitions, including a new fiscal stimulus package he has hinted will be worth ‘trillions of dollars’.
That pledge, alongside earlier spending agreements from the last Congress, has rattled bond markets for weeks, pushing benchmark 10-year Treasury note yields some 30 basis points higher to a ten-month high of 1.161% in overnight trading.
Last night’s moves were also linked to comments from Atlanta Federal Reserve bank president Raphael Bostic, who said he was not “super concerned” about the rise in longer-term yields and didn’t think the Fed would need to track it too closely.
Stocks, in fact, could face a series of tests this week beyond the rise in Treasury yields that could set the tone for this year’s early bull market. At least eight companies will launch IPOs this week, lead by Poshmark and Petco Health, in an effort to raise around $5 billion and extend last year’s run of successful new listings.
Big bank earnings on Friday, as well, including fourth-quarter updates from JPMorgan Chase (JPM) – Get Report, Citigroup (C) – Get Report and Wells Fargo (WFC) – Get Report will be in sharp focus this week, as will key retail sales data for the month of December.
Early indications Tuesday, however, suggest some modest risk appetite, with futures contracts tied to the Dow Jones Industrial…
Read more:Dow Futures Edge Higher Amid Trump Impeachment Drama; Treasury Yields Extend Bond
