Thursday March 11th

11-03-2021

Nasdaq futures jump as tech shares gain, Dow looks set to add to record

U.S. stock index futures rose on Thursday after the market’s blue-chip average set another record high a day earlier. Futures contracts for the Dow Jones Industrial Average added 100 points, or 0.3%. S&P 500 futures climbed 0.7%. The big winner, however, was the tech-heavy Nasdaq 100 with futures jumping 2%. The move in futures came after the Dow jumped 464 points to a record closing high on Wednesday. The S&P 500 rose 0.6%, while the Nasdaq Composite ticked down slightly as the rotation away from growth stocks resumed. A rotation back into tech shares appeared to be happening early Thursday. Tesla was up 4% in premarket trading. Apple jumped 2%, while Amazon, Alphabet, Facebook Microsoft shares were all at least 1% higher. The 10-year Treasury yield slide for a second day, helping sentiment. The 10-year yield was last down about 3 basis pints to 1.49%. (1 basis point is 0.01%) On the data front, investors cheered a slightly better-than-expected reading on weekly jobless claims. The Labor Department reported that first-time filings for unemployment insurance in the week ended March 6 totaled a seasonally adjusted 712,000, below the Dow Jones estimate of 725,000. Wednesday’s gains came as the House passed the $1.9 trillion stimulus package, sending it to President Joe Biden, and while the bond market digested a $38 billion auction of 10-year Treasury bonds without a spike in volatility. Rising interest rates accelerated the rotation away from tech and growth stocks in recent weeks and into more cyclical sectors, such as energy. Higher rates make profits in far-off years seem less attractive to investors and can knock down stocks with relatively high valuations. “The faster-than-expected acceleration of U.S. economic growth appears to be lifting inflation and longer-term interest rates,” Gary Schlossberg from the Wells Fargo Investment Institute said in a note. “The pace of these increases have been a recent concern to investors, but a recovery in interest rates and inflation is a typical occurrence early in a recover – faster this time, in our opinion, because of the unusually strong economic growth rebound.” This week has been stronger for the growth stocks overall, however, as a surge for the Nasdaq on Tuesday pulled the index out of correction territory. The Invesco QQQ Trust, which tracks the Nasdaq 100, is up slightly this week after falling the previous three weeks. Asia-Pacific markets traded broadly higher Thursday, following a relatively strong finish on Wall Street overnight after U.S. lawmakers passed a $1.9 trillion coronavirus relief package. The Nikkei 225 in Japan rose 0.6%, or 175.08 points, to 29,211.64 while the Topix index added 0.27%, or 5.18 points, to 1,924.92. The Japanese market in recent sessions had struggled to hold onto gains. In South Korea, the Kospi rose 1.88%, or 55.58 points, to 3,013.70. Elsewhere, the Kosdaq index added 2.02%, or 17.94 points, to 908.01. Hong Kong’s Hang Seng Index added 1.47% in late-afternoon trade. Chinese mainland shares also rose Thursday after struggling in recent sessions as authorities in Beijing set a relatively low GDP target and signaled a shift away from measures designed to keep the economy afloat. The Shanghai composite rose 2.36%, or 79.09 points, to 3,436.83 while the Shenzhen component added 2.23%, or 303.03 points, to 13,866.37. Crude oil prices rose on Thursday as vaccine rollouts bolstered the economic outlook and U.S. fuel stocks fell sharply, although gains were capped by a surge in crude oil inventories after last month’s Texas storm. Brent crude oil futures for May rose 77 cents, or 1.1%, to $68.67 a barrel, while U.S. West Texas Intermediate crude for April was up 70 cents, or 1.1%, at $65.13. Gold prices gained for a third straight session on Thursday, hitting a one-week peak as softer inflation data in the United States pressured Treasury yields and the dollar index. Spot gold was up 0.5% at $1,734 per ounce, after hitting its highest since March 3 at $1,739.63 earlier. U.S. gold futures climbed 0.6% to $1,731.60.