E-mini S&P 500 (March): Settled at 3873.50, down 29.50
E-mini Nasdaq-100 (March): Settled at 13,224.25, down 351.75
Tech’s getting slammed again. Yesterday, the Nasdaq lost 2.5% and the added selling overnight is dragging the risk environment lower. We’ve hammered home the rising rate narrative and how a high-velocity move in the 10-year Treasury above 1.25% will tap a pain threshold at 1.50%. Tech is most vulnerable due to exorbitant valuations and debt-ridden balance sheets. Rising Treasury yields force investors to question how much they’re willing to pay for stocks.
Speaking of debt-ridden balance sheets, bitcoin has grabbed headlines as an investment across tech companies like Tesla. Well, bitcoin is down 15% this week and is certainly weighing on the landscape. Not all is negative though, energies and financials gained ground overnight after finishing +3.5% and +1.0%, respectively yesterday. In fact, the Dow was holding in positive territory at the onset of U.S. hours.
Fed Chair Jerome Powell began his 2-day Congressional testimony today at 9:00 a.m. CT. Unlike his friendly Q&A sessions, he’ll be grilled on the state of the economy by representatives as they look to pass President Biden’s monumental $1.9 trillion stimulus package in the coming weeks.
Powell’s been dovish: he even brought bullish tailwinds 2 weeks ago that set the markets on pace for last week’s surge. Can Powell be even more dovish than he has been? This is a real concern for the risk environment today and, given the rise in Treasury yields, it justifies some of today’s selling as profit taking ahead of the biggest event of the week.
Also on today’s economic calendar, Case Shiller Home Price Index came due at 8:00 a.m. CT and Consumer Confidence followed at 9:00 a.m. CT, along with Richmond Fed Manufacturing.
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