Wednesday February 17th


Stock futures are flat after Dow closes at a record, Verizon gains after Berkshire adds position

U.S. stock index futures fluctuated in early morning trading on Wednesday after the Dow closed at a record high a day before. Futures contracts tied to the Dow Jones Industrial Average and S&P 500 lost about 0.1%. Nasdaq 100 futures fell 0.2% Verizon was among the biggest gainers in premarket trading after Warren Buffett’s Berkshire Hathaway revealed a sizable stake in the telecom giant. The shares gained 4% in premarket trading after the latest filing showed Berkshire bought more than $8 billion worth of the stock in the fourth quarter, making Verizon one of the conglomerate’s top six largest holdings. Chevron shares gained 3% in premarket trading as filings showed Berkshire added a large stake in the energy company as well last quarter. Investors will also get a sense of the ongoing economic recovery when January retails sales are released at 8:30 a.m. ET Wednesday. Economists surveyed by Dow Jones are expecting sales to be up 1.2% for the month, following an unexpected decline of 0.7% in December. Bond yields continued to grind higher on Wednesday with the 10-year Treasury yield hitting a high of 1.33%, a level last seen in February 2020. The 30-year rate held steady after hitting its highest level in a year in the previous session. Some on Wall Street believe higher rates could prompt investors to rotate out of equities and into bonds, while also putting pressure on areas of the market, including tech, which have benefited from the low-rate environment. "We are filling in a major gap from March of 2020. So long as we remain orderly and rates move for the right reasons, it’s short term okay,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. “But the Fed is watching. Should financial conditions begin to tighten with the move higher in rates, the Fed will react. And quickly.” The benchmark 10-year rate reached an all-time low of 0.318% in March amid a historic flight to bonds in the depth of the coronavirus crisis. Elsewhere in the market, bitcoin topped $51,000 for the first time on Tuesday, as its surge to new record highs continued. Stocks in Asia-Pacific were mixed on Wednesday as investors monitored bond yields following a recent rise. In Japan, the Nikkei 225 slipped 0.58% on the day to 30,292.19 while the Topix index shed 0.18% to close at 1,961.49. The Taiex in Taiwan surged 3.54% to close at 16,362.29. Hong Kong’s Hang Seng index gained 1.1% to end its trading day at 31,084.94. South Korea’s Kospi closed 0.93% lower at 3,133.73. Markets in mainland China remained closed on Wednesday for the Lunar New Year holidays. Bullish oil prices marked time on Wednesday, as support from supply disruptions in the U.S. south caused by an Arctic blast was offset by expectations that OPEC+ producers may ease their output curbs after April. U.S. West Texas Intermediate (WTI) crude futures dipped 3 cents to $60.02 a barrel at 0510 GMT, retreating from a 13-month high of $60.95 hit on Tuesday. Brent crude futures gained 11 cents, or 0.2%, to $63.46 a barrel, adding to three days of gains. Gold prices fell on Wednesday to their lowest in nearly two weeks as the dollar firmed and U.S. Treasury yields rose, while platinum eased further after scaling a more than six-year high in the previous session. Spot gold was down 0.2% to $1,791.36 per ounce by 0118 GMT, after hitting its lowest since Feb. 4 at $1,785.89 in early trade. U.S. gold futures slipped 0.6% to $1,788.40. Silver shed 0.1% to $27.20.