S&P 500 Day Ahead Outlook: Inflation fears see bears back bashing
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UNLOCK OFFERHere is what you need to know on Friday, February 26:
An ugly day for stock markets on Thursday as the dirty word inflation reared its head again. Just when you thought Powell had killed off the thought, it came back stronger in the sequel! The catalyst appeared to be a poor US 7 year auction where the yield came in at 1.19% versus a prior 0.75%. While yields are still low historically, near negative in some EU countries, and Central Bankers appear unconcerned, stock markets are taking a different view. Perhaps recent crises such as the "irrational exuberance" at the turn of the millennium and the credit-fueled financial crash of 2008 are fresher in investors minds than in Central Bankers. Either way, the market is looking well out the time horizon and worrying that inflation could get out of control.
The Bank of England's Chief Economist Andy Haldane spoke on Friday saying “For me, there is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets.” So take that doves!
As a result, most markets took a negative tone with Nikkei in Japan closing nearly 4% lower on Friday. Oil took potential supply increases badly dropping over $2 to $62 for WTI. The Dollar was positive again hitting 1.2110 versus the Euro and Dollar Index rising to 90.60. The US 10 Year yield currently sits at 1.47% having been 1.6% on Thursday.
European markets are mostly lower with the EuroStoxx outperforming with a 0.1% gain. FTSE is 0.6% lower and Dax 0.8% lower.
US futures are mixed with Dow Jones future down 0.4%, S&P down 0.1% and Nasdaq future up 0.1%.
S&P 500 News
Australian Central Bank enters the bond market, buying bonds to try and stop the recent surge in rates in a surprise move.
ECB Chief Economist Philip Lane told a Spanish newspaper that the ECB is monitoring the recent surge but will not try to control the yield curve-Reuters.
BoE Chief Economist warns other central bankers on inflation trends " “For me, there is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets.”
US House is close to approving President Biden's $1.9 trillion stimulus. House aims to pass the bill on Friday.
US Personal Spending comes in at 2.4% versus 2.5% expected for January.
FDA set to vote on Friday on JNJ's covid single-shot vaccine.
BioNTech and Pfizer saw its covid-19 vaccine receive approval from the FDA to store the vaccine at standard freezer temperatures for up to two weeks instead of the ultra-cold storage required up to now. It should mean a more widespread distribution of the vaccine.
DoorDash says outlook will struggle as the economy reopens as the food delivery company delivers its first results since going public. Shares are lower in pre-market by 10%.
FootLocker shares are lower after disappointing results
DraftKings shares are trading higher after strong Q4 results. currently up nearly 4% in pre-market.
Beyond Meat strikes a deal with McDonald's to be the preferred supplier for McDonald's McPlant burger-CNBC.
Dell posted positive results due to stay at home office setups.
AT&T Inc is to sell some of its stake in DirecTV to buyout firm TPG for a steep loss on what AT&T paid for the business in 2015.
Apple, shares in KIA rose after Reuters cites a South Korean news site as saying the was still potential for KIA and Apple to form a partnership.
Ups and Downs
Twitter saw its price target raised at Goldman Sachs and Rosenblatt.
Etsy Inc saw its price target raised at Needham.
Dominos Pizza had its price target cut by Wedbush.
Papa Johns International saw its price target reduced at KeyBanc.
Dell rated by RBC as outperform.
Airbnb rated a top recovery play by Susquehanna.
The author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
Errors and omissions excepted.
Here is what you need to know on Friday, February 26:
An ugly day for stock markets on Thursday as the dirty word inflation reared its head again. Just when you thought Powell had killed off the thought, it came back stronger in the sequel! The catalyst appeared to be a poor US 7 year auction where the yield came in at 1.19% versus a prior 0.75%. While yields are still low historically, near negative in some EU countries, and Central Bankers appear unconcerned, stock markets are taking a different view. Perhaps recent crises such as the "irrational exuberance" at the turn of the millennium and the credit-fueled financial crash of 2008 are fresher in investors minds than in Central Bankers. Either way, the market is looking well out the time horizon and worrying that inflation could get out of control.
The Bank of England's Chief Economist Andy Haldane spoke on Friday saying “For me, there is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets.” So take that doves!
As a result, most markets took a negative tone with Nikkei in Japan closing nearly 4% lower on Friday. Oil took potential supply increases badly dropping over $2 to $62 for WTI. The Dollar was positive again hitting 1.2110 versus the Euro and Dollar Index rising to 90.60. The US 10 Year yield currently sits at 1.47% having been 1.6% on Thursday.
European markets are mostly lower with the EuroStoxx outperforming with a 0.1% gain. FTSE is 0.6% lower and Dax 0.8% lower.
US futures are mixed with Dow Jones future down 0.4%, S&P down 0.1% and Nasdaq future up 0.1%.
S&P 500 News
Australian Central Bank enters the bond market, buying bonds to try and stop the recent surge in rates in a surprise move.
ECB Chief Economist Philip Lane told a Spanish newspaper that the ECB is monitoring the recent surge but will not try to control the yield curve-Reuters.
BoE Chief Economist warns other central bankers on inflation trends " “For me, there is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets.”
US House is close to approving President Biden's $1.9 trillion stimulus. House aims to pass the bill on Friday.
US Personal Spending comes in at 2.4% versus 2.5% expected for January.
FDA set to vote on Friday on JNJ's covid single-shot vaccine.
BioNTech and Pfizer saw its covid-19 vaccine receive approval from the FDA to store the vaccine at standard freezer temperatures for up to two weeks instead of the ultra-cold storage required up to now. It should mean a more widespread distribution of the vaccine.
DoorDash says outlook will struggle as the economy reopens as the food delivery company delivers its first results since going public. Shares are lower in pre-market by 10%.
FootLocker shares are lower after disappointing results
DraftKings shares are trading higher after strong Q4 results. currently up nearly 4% in pre-market.
Beyond Meat strikes a deal with McDonald's to be the preferred supplier for McDonald's McPlant burger-CNBC.
Dell posted positive results due to stay at home office setups.
AT&T Inc is to sell some of its stake in DirecTV to buyout firm TPG for a steep loss on what AT&T paid for the business in 2015.
Apple, shares in KIA rose after Reuters cites a South Korean news site as saying the was still potential for KIA and Apple to form a partnership.
Ups and Downs
Twitter saw its price target raised at Goldman Sachs and Rosenblatt.
Etsy Inc saw its price target raised at Needham.
Dominos Pizza had its price target cut by Wedbush.
Papa Johns International saw its price target reduced at KeyBanc.
Dell rated by RBC as outperform.
Airbnb rated a top recovery play by Susquehanna.
The author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
Errors and omissions excepted.
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