U.S. stocks were indicated modestly higher on Thursday as the main benchmarks looked to snap a two-day skid that has come even as a rapid rise in borrowing costs, reflected in surging government bond yields, has cooled somewhat.
Early action will see investors focus on U.S. weekly jobless benefit claims data and a fresh read of fourth quarter gross domestic product, which would provide the latest update on the state of the pandemic-wounded economy.
How are stock benchmarks performing?
- Futures for the Dow Jones Industrial Average YMM21,
-0.02% YM00,-0.02% were trading 80 points, or 0.2%, higher at 32,399. - S&P 500 futures ES00,
-0.01% ESM21,-0.01% added 10.70 points to reach 3,891.50, a rise of 0.3%. - Nasdaq-100 futures NQ00,
+0.07% NQM21,+0.07% were at 12,848.74, up 54.75 points for a 0.4% gain.
On Wednesday, the Dow DJIA,
What’s driving the market?
Markets have wobbled in recent days, with investors attributing some of the decline to quarter-end rebalancing and a choppy rotation in and out of sectors that are expected to perform better when the economy stages a more pronounced recovery from the COVID-19 pandemic.
Though bond yields have slipped in the past week on growing concerns about extended COVID lockdowns in Europe, the rise in yields so far this year is expected to lead to substantial selling of stocks and buying of bonds as funds rebalance, Sphia Salim, European rates strategist at Bank of America, was quoted as saying in the Financial Times. Some $88 billion is slated to be shifted from equities to bonds, BofA estimates.
Long-dated Treasury bond yields this week have fallen significantly though, with the 10-year benchmark note TMUBMUSD10Y,
On Wednesday, Federal Reserve Chairman Jerome Powell, in his second day of congressional testimony about the U.S. ‘s economic response to the pandemic, said that he isn’t concerned about the recent rise in long-term bond yields. Powell and Treasury Secretary Janet Yellen said they would continue to promote policies that support a healthy recovery from the public health crisis.
The strength of the economic recovery will be on display later Thursday, with the jobless benefit claims data for the week ended March 20, due at 8:30 a.m. Eastern. Economists surveyed by Dow Jones are expecting the 735,000 applications from 770,000 in the period before.
Meanwhile, consensus estimates are for a reading of fourth-quarter GDP to hold at 4.1% from previous estimates.
A number of Fed speakers are expected on the day, including Fed Vice Chairman Richard Clarida at around 10 a.m., Atlanta Fed President Raphael Bostic at noon, Chicago Fed President Charles Evans at 1 p.m. and San Francisco Fed President Mary Daly at 7 p.m.
Could Bitcoin Benefit From Wall Street’s Quarter-End Rebalancing?
A migration of billions of dollars is set to happen from stocks to bonds by the end of March as US-based asset management firms rebalance their portfolios. And it could have a direct or an indirect impact on the Bitcoin market. Nikolaos Panigirtzoglou, a cross-asset research analyst at JPMorgan & Chase, noted that pension funds, […]