The Market Today
U.S. Cases Remain Contained Despite Global Surge
by Craig Dismuke, Dudley Carter
Another Quiet Day: There are no reports on today’s economic calendar. Netflix will report earnings after the close.
CORONAVIRUS UPDATE (VS Coronavirus Chartbook – PDF)
Vaccination statistics continued to be prominent in U.S. headlines while concerns about India’s outbreak remained a focus in the Eastern Hemispheres. After the CDC announced over the weekend more than 50% of U.S. adults had received at least one dose of a vaccine, reports indicated the White House would embark on a widespread media campaign to stress shot eligibility. The CDC also confirmed earlier reports that data show only 6,000 cases of infections, or a rate of less than 0.01%, out of the 84 million Americans that have been fully vaccinated. Cases in India hit a record amid a concerning surge, the world’s fastest, that saw the country added to the U.K.’s no-travel list. India’s stock market dropped 1.8% Monday, spoiling a mostly positive day of trading in Asia. The EU increased its order size from Pfizer and BioNTech by 100 million doses to 600 million. The U.S. State department is changing its travel advisory system to reflect coronavirus issues. The non-binding ratings will reportedly label 80% of countries as “no-go zones.” The FDA halted production of the J&J vaccine at an Emergent BioSolutions plant in Baltimore. At issue appears to be a key ingredient in 15 million doses at the plant which are now quarantined.
24 HOURS OF MARKET ACTIVITY
U.S. Stock Stumble Trips up Global Equities Near Record Levels
U.S. stocks stumbled Monday from last Friday’s record levels as investors awaited corporate earnings announcements to fill a week almost void of economic data. Tech led losses, evidenced by the Nasdaq’s day’s-worst 1.0% drop. However, the S&P 500’s 0.5% decline was fueled by losses across nearly every sector. The Dow dropped 0.4%. Shares of Coca-Cola gained after the company beat analysts’ earnings expectations in a pre-market announcement. IBM rose in after-hours trading after reporting better-than-expected results while United’s shares dipped on a miss. Treasury yields also unwound a portion of last week’s move. After dropping 8 bps last week, the 10-year yield recovered 2.5 bps on Monday to close just above 1.60%. A break below that level last Thursday was blamed for technical momentum dragging the yield curve lower in the face of stellar economic data.
Treasury yields had pulled back slightly early Tuesday as Monday’s bout of weakness on Wall Street spread around the globe. Stocks closed mostly lower across Asia, led by a sharp decline in Japanese equities. Several major prefectures in the country are reportedly considering more restrictive measures to battle rising case counts. The negative momentum gained steam in Europe to drag the Stoxx 600 down 1.2% midway through the domestic trading session. U.S. stock futures had dropped around 0.4% at 7:30 a.m. CT. Global sovereign yields were relatively little changed in response equities’ turn lower. The 10-year Treasury yield, the daily laggard among the major sovereigns, was back near unchanged after trading down 1.4 bps around 7 a.m. CT.