Last Week's Close
E-mini S&P 500 Futures (March): Settled at 3839, up 73.50 on Friday and 29.75 on the week
E-mini Nasdaq-100 Futures (March): Settled at 12,663.75, up 208.75 on Friday and down 247.25 on the week
A sharp reversal from deep in the negative Friday carried into last night’s open, but the exuberance quickly dissipated. Tech’s leading the way lower once again as rates resume their rise on the heels of the Senate passing President Biden’s lauded $1.9 trillion spending package.
Last week was a melting pot of narratives. Disappointing Manufacturing PMI data out of China early in the week was quickly forgotten by the headlines, but clearly not by markets. Johnson & Johnson’s 1-shot vaccine was approved by the FDA and a partnership with Merck will ramp production. State and local governments announced an easing of restrictions, bringing further tailwinds to the reopening trade.
The rise in Treasury yields had paused since capitulatory-like conditions on February 25th but were reinvigorated by comments from Fed Chair Jerome Powell Wednesday; the committee isn’t looking to implement yield curve control. This led to a surge in the longer end of the curve and liquidation across equity markets ensued.
OPEC+ decided to extend production restrictions, further tightening the oil market. On Friday, a much-stronger-than-expected jobs report was headlined by massive growth in the services sector as businesses plan to reopen and the Unemployment Rate dropped to a pandemic low of 6.2%.
The $1.9 trillion fiscal stimulus package returns to the House today after the Senate passed it with small edits over the weekend. Most notably, the $15/hour minimum wage was dropped. The House may vote as early as tomorrow and, if everything stays on track, the bill will be signed by President Biden before the coming weekend.
Benefits from December’s bill expire on March 14th. The massive spending and this week’s auctions (supply) are clearly being priced into the Treasury market; the 10-year hit a high yield of 1.622 on Friday and is hovering at that level this morning.
The ECB grabs the spotlight Thursday with the conclusion of a policy meeting. U.S. CPI data is front and center Wednesday, and the Federal Reserve has entered a quiet period ahead of next week’s policy meeting.
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