Monday April 11th


Stock futures fall as rates rise to start the week

U.S. stock index futures fell early Monday morning as interest rates continued to climb on concerns over tighter monetary policy from the Federal Reserve that could slow economic growth. Futures tied to the S&P 500 fell 0.7%, and Nasdaq 100 futures slid 1.1%. Dow Jones Industrial Average futures dropped 131 points, or nearly 0.4%. Those moves came as U.S. Treasury yields hit a new 3-year high overnight. On Sunday evening, the 10-year Treasury yield hit 2.7741%, or its highest point since early 2019. It topped 2.76% Monday morning to start the week. Yields move inversely to prices and 1 basis point is equal to 0.01%. Twitter’s stock price fell in premarket trading Monday after CEO Parag Agrawal revealed that Elon Musk abandoned his plan to join the company’s board. Shares for the social media company dropped more than 8% before recovering some losses. At 7:56 a.m. ET, shares were down 2.4%. Wall Street is coming off a negative week, with the tech sector being a source of concern. The tech-heavy Nasdaq Composite fell 3.9% last week, while the S&P 500 and Dow dropped 1.3% and 0.3%, respectively. The health-care sector was a bright spot, gaining more than 3%. The fight against inflation is likely to be a market driver this week. Investors will get a look at fresh data, with the consumer price index for March due out on Tuesday and the producer price index following on Wednesday. Cleveland Fed President Loretta Mester told CBS’ “Face the Nation” on Sunday that she still believes the Fed can get inflation under control without causing major damage to the economy. “If you look at the risks, given what’s happening in the world and in the economy, there is an increased risk [of recession],” she said. “But I remain optimistic, and certainly my modal forecast on what is going to happen this year is that the expansion will continue.” Mester added that the Covid lockdowns in China will “exacerbate” the supply chain issues that are contributing to inflation in the U.S. Investors will also be keeping an eye on developments in Ukraine. Russia’s invasion of the country has caused volatility in oil and other commodities markets, which has, in turn, disturbed stocks. Later this week, the first-quarter earnings season will hit its stride with some major banks and airlines reporting earnings. On Wednesday, JPMorgan and Delta Air Lines will report their earnings before the bell. On Thursday, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo are expected to report before markets open. Chinese stocks led losses in Asia-Pacific markets on Monday as investors reacted to China's inflation data for March and monitored the Covid situation on the mainland. Mainland as well as Hong Kong stocks have been tumbling all day, but losses deepened by Monday's market close. The CSI 300 index, which tracks the largest mainland-listed stocks, fell 3.09% to 4,100.07. Shanghai composite was down 2.61% to about 3,167.13 while the Shenzhen component tumbled 3.671% to 11,520.21. Hong Kong's Hang Seng index closed 3.03% lower at 21,208.30. Elsewhere, the Nikkei 225 in Japan slipped 0.61% on the day to 26,821.52 while the Topix index shed 0.38% to 1,889.64. South Korea's Kospi dipped 0.27% to close at 2,693.10. Oil prices dropped by more than $2 a barrel on Monday after a second straight weekly decline on plans to release record volumes of crude and oil products from strategic stocks and on continuing coronavirus lockdowns in China. Brent crude for June delivery was down $2.97, or 2.9%, at $99.78 a barrel. U.S. West Texas Intermediate crude lost $3.32, or 3.4%, to trade at $94.96. Palladium climbed 3.95% to $2,521.55 per ounce, having earlier hit a peak since March 24 at $2,550.58. Platinum rose 1% to $984.54. London Platinum and Palladium Market on Friday said it would suspend both Russian refiners on its list, JSC Krastsvetmet and the Prioksky Plant of Non-Ferrous Metals, from trading in London, the metals’ biggest trade hub. Elsewhere, spot gold rose 0.5% to $1,954.78 per ounce, after hitting a more than two-week high of $1,958.96. U.S. gold futures were 0.7% higher at $1,958.70.