Stock futures tick before Fresh Powell testimony

Stock markets have faltered in recent days, after a strong start to the year, and high-tech companies have declined. Investors said an increase in government bond yields, driven by improved growth prospects and rising inflation expectations, accelerated a rotation of technology stocks that led markets to grow during the pandemic and to the best-placed stocks to benefit from. an end to the blockages.

“This is indeed a function of reopening savings,” said Brian O’Reilly, head of market strategy at Mediolanum Investment Funds. “Bond yields are rising due to good vaccination rates in the US and the UK and cause a simple rotation, far from everything that worked well last year, stocks at home, to those that did not, the exit in out of stock. “

“It’s a good story in some ways, in the sense that the market is trying to appreciate the economies that will be reopened,” he added.

The yield on the 10-year benchmark treasury note, which is reversing its price, has risen to a one-year high this week. It rose 1.411% on Wednesday from 1.363% on Tuesday.

Powell on Tuesday reaffirmed its commitment to keeping light monetary policies unchanged for the foreseeable future, which has helped stem large losses among technology companies. Investors are waiting for the next day of testimony at the Senate Banking Committee on Wednesday. Mr Powell is due to speak at 10 am ET.

While the Fed has kept the same message since the pandemic hit, the strength of the recovery could cause it to change course sooner than many investors expected, said Paul O’Connor, head of multi-asset management at Janus Henderson Investors.

“Markets expect this to be a story in 2022, but we are seeing significant improvements in US GDP. Somewhere, in the middle of this year, the discussion about reducing taper will have to take place “, he said.

The latest batch of earnings reports will focus on Wednesday. Nvidia,

Booking Holdings and L Brands will publish their reports after the markets close.

PRA Health Sciences jumped more than 20% before the opening bell after Dublin-based Icon said it would buy the company through a deal worth about $ 12 billion.

The square fell 2.9% in premarket movements after the payment company reported lower profit in the late fourth quarter on Tuesday.

Data on new home sales will also be analyzed when released at 10 a.m. ET. The US real estate market performed well during the pandemic, due in part to strong demand and low mortgage rates.

Bitcoin rose 3.9% to $ 49,889.73 on Wednesday, after falling 13% on Tuesday. They also won other cryptocurrencies that fell on Tuesday, such as ether.

In premarket trading, Tesla increased by 4.5%. The company’s stock price has fluctuated alongside bitcoin in recent days after the electric vehicle maker said it bought $ 1.5 billion in cryptocurrency.

Abroad, the Stoxx Europe 600 pan-continental index rose 0.5%.

Companies ready to benefit from the cessation of traffic restrictions were some of the strongest performances. The travel agency TUI increased by 8.5%, while the UK-listed shares of the cruise operator Carnival added 7.4%. Dufry,

a duty-free store operator, gained 7.6%, and the operator of the airline IAG increased by 4.4%.

Asia-Pacific indices fell. The biggest losses were in Hong Kong, where the city government moved to capitalize on expanding markets by raising a share trading tax. Hong Kong’s Hang Seng benchmark index fell 3%, Hong Kong’s trade and offsets fell 8.8%, even though the exchange operator showed record annual revenues and net profit.

CIS 300 in mainland China, which includes large companies listed in either Shenzhen or Shanghai, fell by more than 2.5%, and Kweichow Moutai, which weighed heavily, fell by more than 5%. The index has now fallen for four of the five sessions since the Lunar New Year break. The Japanese Nikkei 225 fell 1.6%.

Andy Maynard, head of equities at China Renaissance Securities, said investors were concerned about the high valuations after rapid operations in the mainland Chinese and Hong Kong markets, especially amid rising bond yields. In a potential growing caution, he remarked: “You don’t see institutions buying on their feet.”

—Caitlin Ostroff contributed to this article.

Write to Will Horner to [email protected] and Xie Yu to [email protected]