Surging Bond Yields Send Nasdaq Futures Tumbling: Markets Wrap

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(Bloomberg) -- Treasury yields surged, Nasdaq 100 Index futures tumbled and planetary stocks were dragged down by interest that cardinal banks volition person to rise rates sooner than expected.

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Treasuries fell crossed the curve, pushing two-year and 10-year yields up to levels past seen earlier the pandemic roiled markets. In Europe, benchmark yields connected German indebtedness were connected the verge of turning affirmative for the archetypal clip since aboriginal 2019.

U.S. stocks were poised to driblet erstwhile the marketplace reopens from a holiday, with Nasdaq futures and exertion stocks down successful premarket trading. Tech besides led the retreat successful Europe, portion vigor shares fluctuated and Saudi stocks rallied.

Brent lipid surged to the highest level successful 7 years, underscoring the ostentation situation facing the Federal Reserve. Easing concerns astir the interaction of the omicron microorganism strain connected demand, unneurotic with shrinking inventories and geopolitical risks are contributing to forecasts of $100 per tube crude aboriginal this year.

Goldman Sachs Group Inc. shares slumped arsenic overmuch arsenic 3.1% successful premarket trading aft reporting worse-than-expected fourth-quarter trading revenue.

Intel Corp., Apple Inc. and Microsoft Corp. besides fell successful aboriginal trading. Bank of America Corp.’s January planetary money manager survey showed that nett allocation to the tech assemblage fell 20% month-over-month to 1%, the lowest since 2008, though they expect ostentation to autumn this twelvemonth and are placing grounds bets connected a roar successful some commodities and stocks overall.

Global equities person had a volatile commencement to the twelvemonth arsenic investors displacement retired of much costly and rates-sensitive sectors specified arsenic exertion into cheaper, alleged worth shares. Market participants are present waiting for the net play to gauge whether companies tin proceed delivering robust profits contempt higher costs and challenges from omicron.

“With rates biased higher implicit the coming months, investors should beryllium prepared for parts of the tech assemblage to again beryllium challenged,” Seema Shah, main strategist astatine Principal Global Investors, wrote successful a enactment to investors. “Although rising enslaved yields are challenging the full tech sector, investors indispensable separate betwixt profitless names that are a agelong mode from demonstrating steadfast earning powerfulness and mega-cap tech firms that tin support their margins.”

A gauge of the dollar rose. The yen initially declined aft the Bank of Japan sat pat connected argumentation portion nudging up its ostentation projection.

For much marketplace analysis, work our MLIV blog.

What to ticker this week:

  • Morgan Stanley, Bank of America, UnitedHealth Group and Netflix are among companies publishing net during the week

  • U.S. information includes Empire manufacturing Tuesday, lodging starts Wednesday and jobless claims Thursday

  • Interest-rate decisions owed from nations including Indonesia, Malaysia, Norway, Turkey and Ukraine, Thursday

  • EIA crude lipid inventory report, Thursday

Some of the main moves successful markets:

Stocks

  • Futures connected the S&P 500 fell 1% arsenic of 7:40 a.m. New York time

  • Futures connected the Nasdaq 100 fell 1.6%

  • Futures connected the Dow Jones Industrial Average fell 0.8%

  • The Stoxx Europe 600 fell 1.1%

  • The MSCI World scale was small changed

Currencies

  • The Bloomberg Dollar Spot Index roseate 0.1%

  • The euro fell 0.2% to $1.1387

  • The British lb fell 0.4% to $1.3598

  • The Japanese yen was small changed astatine 114.59 per dollar

Bonds

  • The output connected 10-year Treasuries precocious 3 ground points to 1.81%

  • Germany’s 10-year output was small changed astatine -0.03%

  • Britain’s 10-year output was small changed astatine 1.19%

Commodities

  • West Texas Intermediate crude roseate 1.4% to $85 a barrel

  • Gold futures fell 0.1% to $1,814.40 an ounce

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