Dow Futures Higher As Bond Markets Steady, Vaccine Rollout Accelerates; ADP Jobs Report In Focus

Dow Futures Higher As Bond Markets Steady, Vaccine Rollout Accelerates; ADP Jobs Report In Focus

A pledge to have enough coronavirus vaccine supply for every American citizen by the end of May from President Joe Biden has investors looking for a hard pandemic exit in the months ahead.

The Tuesday Market Minute

  • Global stocks extend gains as bond markets steady and sentiment improves amid an accelerating vaccine rollout in the United States.
  • President Joe Biden pledges enough vaccine supply for every American by the end of May, while CDC data shows 78.2 million vaccine doses administered as of March 2.
  • Benchmark 10-year Treasury note yields hold at 1.44% as market volatility eases.
  • Eurozone PMI data suggests a double-dip recession for the world’s biggest economic bloc in Q1. 
  • Oil jumps higher amid reports that OPEC+ members will extend production cut pact into April at tomorrow’s Vienna meeting.
  • U.S. equity futures suggest firmer open on Wall Street ahead of fourth-quarter earnings from Dollar Tree and the ADP February payroll report at 8:15 am Eastern time.

U.S. equity futures powered higher Wednesday as bond markets remained dormant for a second consecutive session and investors sentiment improved following a pledge on vaccine availability from President Joe Biden. 

Biden told reporters late Tuesday that the U.S. will have enough vaccine supply to inoculate every American citizen by the end of May after invoking the Defense Protection Act to compel Merck & Co.  (MRK) – Get Report to assist Johnson & Johnson  (JNJ) – Get Report with its newly-approved jab.

With the U.S. administering around 1.8 million vaccine doses each day, and new cases down from 20% from the previous weeks to around 50,000 per day, investors are starting to bet on a late Spring re-opening of the broader economy that could have profound affects on jobs, growth and, potentially, consumer price inflation.

However, with bond markets holding steady following last week’s yield spike, and slower growth projections in Europe adding to downward pressure on U.S. interest rates, stocks look set for a solid start to the Wednesday session.

Futures contracts tied to the Dow Jones Industrial Average suggest a 225 point opening bell gain, while those linked to the S&P 500 are priced for a 25 point move to the upside.

The tech-focused Nasdaq, which bore the brunt of last week’s yield moves, is set for slightly more modest 100 point jump at the start of trading as benchmark 10-year Treasury bond yields were marked at 1.445%. 

ADP will publish its reading of private payroll growth for the month of February at 8:15 am Eastern time, with analyst looking for an increase of around 200,000, a figure that will feed into expectations for Friday’s non-farm payroll report from the Labor Department. 

Oil prices were notably higher in early trading amid reports that OPEC members, as well as non-cartel member allies such as Russia, will rollover their previously-agreed production cuts when they meet tomorrow in Vienna.

That speculation offset the impact of a 7.4 million barrel increase in U.S. crude supplies reported last night by the American Petroleum Institute.

WTI contracts for April delivery were marked 97 cents higher from their Tuesday close at $60.72 per barrel while Brent contracts for May delivery, the benchmark for global prices, edged $1.00 higher to $63.70 per barrel.

In Europe, stocks built solid early gains despite PMI data showing a likely double-dip recession for the world’s biggest economic bloc over the first three months of the year as a slower vaccine rollout, and stubbornly high infection rates, limit the region’s growth.

In Britain, the FTSE 100 added 1.14% on both the strength of commodity prices and a move by Chancellor of the Exchequer Rishi Sunak to extend furlough payments to British workers until September ahead of his semi-annual budget statement to Parliament later today.

Overnight in Asia, China stocks lead a regional rebound that lifted the MSCI ex-Japan index 1.8% heading into the final hours of trading, while a firmer yen held gains in check for the Nikkei 225 in Tokyo, which closed 0.51% higher at 29, 559.10 points.

Provided by: The Street Retirement

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