E-mini S&P 500 Futures (March): Settled at 3867.50, down 31.25
E-mini Nasdaq-100 Futures (March): Settled at 13,055.25, down 224.50
Monday’s strength, as glorious as it was, clearly got a little ahead of itself. U.S. benchmarks struggled to hold gains at key technical levels Tuesday before slipping into settlement. Strength reemerged overnight and all 4 major indices pointed higher ahead of the bell.
Reopening news certainly weighed on the “Work From Home” stocks yesterday, including everything from Zoom to Amazon. Whereas names like Apple pared half of Monday’s gains, financials, energies, and industrials are all still up about 1% over the last week.
Johnson & Johnson’s single-shot vaccine was approved over the weekend and the company announced a deal with Merck yesterday to expand production capacity. Additionally, the state of Texas announced that beginning March 10th, businesses can fully open to 100% capacity and the mask mandate will be lifted. Other states and local governments have also eased restrictions.
After a 3-day slide, rates pointed slightly higher this morning and pose as a headwind to this overnight strength. The U.S. 10-year Treasury is up 5.5 basis points to 1.45% and the German 10-year Bund has joined the uptick. This comes after Bloomberg ran a story saying the ECB is comfortable with the recent bond selloff after data this week showed firm to stronger-than-expected inflation across the Eurozone.
Last night, Australian QoQ GDP for Q4 beat expectations at 3.1% versus 2.5% and this morning most of Europe, other than Germany, had improved Services PMI from the preliminary reads earlier in the month. ECB Executive Members Fabio Panetta, Luis de Guindos, and Isabel Schnabel speak at 7:00 a.m., 9:00 a.m., and 1:30 p.m. CT.
Congress will certainly garner headlines as the Senate works to pass President Biden’s lauded $1.9 trillion spending package, but with a deadline next weekend, it’s job data that will steal the show. The first look at February jobs via the private ADP survey fell shy of expectations at 117,000 versus 177,000.
The big Nonfarm Payroll report is due Friday and expectations are certainly wide. Officially, analysts expect 180,000 jobs to have been added in February. After 3 months of disappointing jobs gains, given the steadfast increase in economic activity, there will be a tremendous emphasis on this report. A hot number would reinvigorate rates and likely cap this stock market rally in the near term.
Today, we also look to Services data from the U.S. with final February PMI due at 8:45 a.m. CT and the more closely watched ISM Non-Manufacturing read, which followed at 9:00 a.m. CT. Also, 2021 Fed voters Raphael Bostic and Charles Evans speak at 11:00 a.m. and noon CT.
Interested in our technical perspective? Please sign up to have Blue Line Futures technical outlook, actionable bias, and proprietary levels emailed to you each day.