Marketmind: A pause for breath

This post was originally published on this site

Markets are enjoying a respite of sorts. With 10-year Treasury yields down five basis points from recent highs, the Nasdaq has managed to rebound around 10% from late-January troughs. Europe’s STOXX 600 is opening higher after bumper earnings propelled the index to its best day in two months.

Meanwhile Walt Disney (NYSE:DIS) Co. assuaged fears, raised after Netflix (NASDAQ:NFLX)’s lacklustre earnings report, that the entertainment streaming sector faces a reckoning as the pandemic ends. Disney shares rose 8% after-hours thanks to a 34% revenue jump and predictions of stronger subscriber growth.

Wall Street futures signal a weaker open however as the release of U.S. January inflation data comes into view. CPI is forecast at a four-decade high of 7.3% but many hope the number will show the economy is starting to work its way through supply glitches and labour shortages.

More than five quarter-point Fed interest rate hikes are currently priced by year-end but the data could swing those bets either way.

Bond market signals have been reassuring for tech investors. Thursday’s 10-year Treasury auction saw the strongest demand since May 2020 in a sign that buyers will rush to grab higher yields, potentially capping their rise. Let’s see what happens at a 30-year auction later in the day.

Similarly, Spain on Wednesday took 60 billion euros in bids for a 7 billion-euro 30-year issue(Spanish 10-year yields are up some 35 bps this month).

Key developments that should provide more direction to markets on Thursday:

-Credit Suisse ends torrid year with $2.2 bln Q4 loss; SocGen quadruples profit

-Unilever warns of high inflation, rules out big M&A; AstraZeneca (NASDAQ:AZN) sees 2022 growth but COVID boost fades

-UK RICS housing survey

-Swedish Central Bank announces interest rate decision 0830 GMT

-ECB board member Philip Lane speaks 1315 GMT

-Bank of England Governor Andrew Bailey speaks 2015 GMT.

-U.S CPI/weekly jobless figures

-US 30-year bond auction

-U.S. earnings: Linde (NYSE:LIN), Twitter (NYSE:TWTR), Coca-Cola (NYSE:KO), Moody, Philip Morris (NYSE:PM), Kellogg (NYSE:K), Expedia (NASDAQ:EXPE), Western Union (NYSE:WU), Mohawk, First Energy

-Emerging market central banks: Indonesia, Mexico, Peru, Serbia,

-South Africa President Ramaphose to deliver state of the nation address