AMD News – Dow Futures Gain as CDC Drops Mask Mandate, Tech Stocks Rebound
The Friday Market Minute
- Global stocks consolidate their late-week rebound following mask guidelines changes from the CDC, but inflation concerns keep investors cautious following a series of hotter-than-expected reading.
- Tech stocks are set for their fourth consecutive weekly decline, the longest losing streak since August of 2019.
- Benchmark 10-year note yields ease to 1.641% in early New York trading ahead of April retail sales data.
- The CBOE’s main equity volatility index, the VIX, falls 22.2% to trades at 21.50 as global markets steady.
- CDC data shows 119 million Americans have now been fully vaccinated against the coronavirus, with around 266.6 million doses administered as of Wednesday.
- U.S. equity futures suggest a firmer open on Wall Street ahead of April retail sales data at 8:30 am Eastern time.
Wall Street futures traded higher Friday, although major U.S. benchmarks will likely close out the week in negative territory, as investors re-group from a series of inflation shocks and focus on re-opening prospects in the wake of the CDC’s new guidelines on masks and social distancing.
In what could be the most significant decision of the pandemic, the U.S. Centers For Disease Control and Prevention said yesterday that fully-vaccinated Americans no longer need to wear masks in public spaces, citing data that indicates little chance of infection from new variants and little or no chance of passing on the virus.
“We needed to take the time to review the full body of evidence to get this right, and that’s how we came to this decision.” the CDC said.
The changes were immediately adopted by lawmakers in Washington, many of whom removed masks for key meetings and media statements, and will likely accelerate moves to return to work, businesses, restaurants and entertainment venues in the weeks ahead.
With that increase in activity, however, also comes the prospect for even faster inflation, a growing concern for investors now that consumer price increases are running at their fastest pace since 2009 and factory-gate inflation hit its highest level since 2010 last month, according to Labor Department data.
How long that inflation will last is now the market’s central debate, with the Federal Reserve insisting base-effects will slow CPI gains over the second half of the year and others warning that bottlenecks, labor market shortages and commodity price gains will lead to a longer run of above-trend inflation readings.
Tech stocks — the equity market’s most interest-rate sensitive asset class — are firmly in the latter camp, with the Nasdaq Composite heading for its fourth consecutive weekly decline, the longest losing streak in nearly two years.
Bond markets, however, have been more sanguine, with benchmark 10-year note yields easing to 1.645% in overnight trading amid a pullback for the U.S. dollar and a solid — although by no means spectacular — auction of 30-year bonds yesterday.
With April retail sales data due at 8:30 am Eastern time, and the CBOE”s VIX volatility index falling 22.4% in extended trading to 21.41 points, U.S. stocks look set for a solid end to the week.
Futures contracts tied to the Dow Jones Industrial Average suggest a 175 point gain for the 30-stock average, while those tied to the S&P 500 priced for a 27 point advance.
Nasdaq futures, meanwhile, look set to open 130 points higher at the start of trading, powered by solid pre-market gains for Tesla ((TSLA)) – Get Report, Apple (AAPL) – Get Report, and chipmaker AMD (AMD) – Get Report.
Walt Disney (DIS) – Get Report shares were another notable pre-market mover, with shares falling 3.7% to $171.80 each after the media and entertainment group posted a weaker-than-expected total for subscribers to its Disney+ streaming service and a 15% decline in March quarter revenues.
Away from equities, Dogecoin prices surged 35% to just under 53 cents after Tesla founder and CEO Elon Musk Tweeted that he was “working with developers” of the once-farcical digital token, while renewing his criticism of bitcoin.
In oil markets, the re-opening of the Colonial Pipeline in the United States following last week’s cyber attack, as well as demand concerns from India, where coronavirus infections have topped 24 million, were offset by a weaker U.S. dollar as prices edged higher in overnight trading to take WTI crude to $64.50 per barrel.
In Europe, stocks were firmly higher on the session, with the Stoxx 600 rising 0.5% in Frankfurt, but are still set to close out the week with a 1.4% decline, the worst since late February.
In Asia, the region-wide ex-Japan benchmark gained 0.83% in a muted session, while Japan’s Nikkei 225 surged 2.32% to close at 28,084.47 points.