US futures were mixed as underperformance in the Nasdaq 100 signaled the rotation away from pandemic favorites is gaining ground. Treasury yields halted a slide that had taken them to a five-week low.
Contracts on the tech-heavy Nasdaq were paced by a decline of 8% in Netflix in premarket trading after the company reported its worst quarter in eight years. S&P 500 contracts were steady, with the US benchmark this week staging an abrupt reversal from recent peaks.
Stocks near record highs are coming under pressure from the threat of new lockdowns, sapping optimism that growth is set to roar back from pandemic-induced recessions. Japan is moving towards declaring a state of emergency while the virus tears through the developing world.
“Markets remain very much caught between the rock of improving macroeconomic conditions and the treacherous waters of geopolitical risks and alarming Covid-19 case growth in some corners of the world,” according to ING Groep NV strategists including Padhraic Garvey in a note to clients.
In Europe, tech firms fueled a gain in the Stoxx Europe 600 Index after an upbeat 2021 sales forecast from Dutch chip-equipment maker ASML Holding NV.
The dollar rose for a second day, the longest streak since March. Treasuries paused a rally that sent the 10-year yield to its lowest level in more than five weeks and within reach of 1.5%.
Here are some key events to watch this week:
- EIA crude oil inventory report on Wednesday.
- European Central Bank rate decision and President Christine Lagarde briefing on Thursday.
- US releases new home sales data Friday.
These are some of the main moves in markets:
- Futures on the S&P 500 Index climbed 0.1% as of 6:54 a.m. New York time.
- The Stoxx Europe 600 Index increased 0.5%.
- The MSCI Asia Pacific Index sank 1.4%.
- The MSCI Emerging Market Index sank 1.1%.
- The Bloomberg Dollar Spot Index rose 0.1%.
- The euro decreased 0.2% to $1.2009.
- The British pound was unchanged at $1.3937.
- The onshore yuan was little changed at 6.498 per dollar.
- The Japanese yen was little changed at 108.13 per dollar.
- The yield on 10-year Treasuries jumped two basis points to 1.57%.
- The yield on two-year Treasuries climbed less than one basis point to 0.15%.
- Germany’s 10-year yield gained one basis point to -0.25%.
- Japan’s 10-year yield fell one basis point to 0.08%.
- Britain’s 10-year yield rose two basis points to 0.746%.
- West Texas Intermediate crude dipped 1.2% to $61.90 a barrel.
- Brent crude dipped 1.1% to $65.87 a barrel.
- Gold strengthened 0.1% to $1 780.69 an ounce.