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
-Emerging market central banks: Indonesia, Mexico, Peru, Serbia,
-South Africa President Ramaphose to deliver state of the nation address