Stock futures traded firmly in green on Monday, indicating a bullish opening on Wall Street, with investors testing the stock’s bullish trend, even as Treasury yields soared.
On Friday, the main benchmarks ended a mixed session with the Dow Jones Industrial Average jumping nearly 300 points and the S&P 500 Index also advancing to a new high, driven by the signing of a new $ 1.9 stimulus project. trillion that should boost consumer spending and ignite economic growth. Most Americans are about to receive $ 1,400 stimulus checks, which started arriving over the weekend.
Still, Washington’s wave of aggressive spending and supercompatible monetary policy have increasingly drawn attention to the uncontrolled deficit – which is at least part of the reason why government borrowing costs have started to rise, even with the Federal Reserve while remaining committed to promoting growth through lower yields and higher inflation. Last week, the 10-year reference Treasury yield reached a pre-pandemic high of around 1.6%, up about 50 basis points in a month. Another warning sign emerged via Bitcoin (BTC-USD), where prices over the weekend exceeded $ 60,000, a new record.
On Friday, Goldman Sachs economists projected that the fiscal bailout package would give the economy even greater momentum in 2021, estimating that gross domestic product would increase by 6% in the first quarter. For this reason, markets will closely watch the testimony of Fed Chairman Jerome Powell this week for clues as to whether the central bank is worrying about movements in the bond market and an economy that may overheat.
However, Goldman noted that “Fed officials are unlikely to see a major problem [with rising rates] at a time when financial conditions remain easy, activity is recovering and powerful growth impulses are set to support the economy throughout the year. “
Meanwhile, technology stocks outperformed the broader market, as the gradual reopening of states and localities – and a mass vaccination effort by COVID-19 that is gaining momentum – has encouraged investors to abandon so-called “stay at home” businesses in favor of big names like Amazon (AMZN), Netflix (NFLX), Apple (AAPL) and Facebook (FB). The rise in interest rates has increased volatility across the technology sector, amid expectations of higher borrowing costs weighing on growing companies.
There was also increasingly positive news in front of the COVID-19 vaccine. Novavax’s shares (NVAX) increased by more than 6% on Friday after a final analysis of the UK pharmaceutical company’s COVID-19 vaccine trial showed that inoculation was 96.4% effective against mild, moderate and severe illnesses caused by the original coronavirus. The analyzes also showed that the vaccine was 86.3% effective against the coronavirus variant that circulates in the United Kingdom and 55.4% effective against the variant that circulates in South Africa.
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7:30 a.m. ET Monday: Stock futures point to mixed opening with falling technology stocks
This is where the markets were trading on Friday morning:
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S&P 500 Futures (ES = F): 3,947.00, +4.75 (+ 0.12%)
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Dow Futures (YM = F): 32,858.00, +86.00 (+ 0.26%)
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Nasdaq Futures (NQ = F): 12,954.75, +21.25 (+ 0.16%)
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Gross (CL = F): $ 65.57 per barrel, -0.04 (-0.06%)
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Gold (GC = F): $ 1,728.40 per ounce, +8.60 (+ 0.50%)
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10-year Treasury (^ TNX): flat, flexible 1.6350
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Javier David is an editor at Yahoo Finance. Follow Javier on Twitter: @TeflonGeek
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