Stock Futures Slid After J&J Vaccine Halted
April 13 2021 - 8:06AM
Dow Jones News
By Anna Hirtenstein
U.S. stock futures slid Tuesday after American authorities
recommended halting the Johnson & Johnson vaccine following
reports of blood clotting.
Futures tied to the S&P 500 edged 0.3% lower, after holding
steady in the European morning. The broad market index on Monday
was hovering near its recent record closing high. Futures on the
technology-heavy Nasdaq-100 ticked down 0.1%.
The Food and Drug Administration and the Centers for Disease
Control and Prevention are reviewing data involving six reported
cases of blood clotting in recipients of the Johnson & Johnson
vaccine.
"It means the pace at which you reach herd immunity is
decreased, and it will take longer for the reopening of the
economy," said Sebastien Galy, a macro strategist at Nordea Asset
Management.
In bond markets, the yield on the 10-year Treasury note ticked
up to 1.680%, from 1.674% on Monday. Yields rise when bond prices
fall. The 10-year yield shot up as high as 1.749% at the end of
March, from 0.915% near the start of the year.
U.S. inflation data, due out at 8:30 a.m. ET, is expected to
show consumer prices climbed sharply in March.
Investors in both stocks and bonds are seeking to assess whether
the projected U.S. economic recovery will trigger a sharp rise in
inflation that may remain for a protracted period. Policy makers
have repeatedly said they expect any increase over the next few
months will prove to be fleeting. A sharp uptick in inflation
expectations earlier this year led to a rise in bond yields, and
damped appetite for richly valued technology stocks last month.
"The equity market is a bit stretched in valuation," said
Ludovic Subran, chief economist at Allianz. "If yields are going a
bit higher on the back of stronger inflation, a lot of
institutional investors could rotate their portfolios out of very
risky equities to less risky bonds and still get quite a
comfortable margin."
Monica Defend, global head of research at asset manager Amundi,
said she expects more volatility in the bond market this year.
"This is what we worry about the most," Ms. Defend said.
"Inflation expectations will play a role at the same time as growth
will be tested, in terms of the robustness of the recovery."
Higher bond yields could weigh on equity markets by creating a
more attractive alternative to stocks, she said. But stocks will
probably continue to climb as long as the economy grows, even if
inflation moves higher, she added.
Overseas, the pan-continental Stoxx Europe 600 ticked up
0.2%.
In Asia, most major benchmarks rose by the close of trading.
Japan's Nikkei 225 Index added 0.7% and Hong Kong's Hang Seng Index
advanced 0.2%.
The Shanghai Composite Index retreated 0.5% after data showed
that Chinese exports in March had risen less than economists had
expected, resulting in a smaller trade surplus than
anticipated.
Bitcoin rose over 4% to a record, trading above $62,500 apiece,
according to data from CoinDesk. Coinbase, the largest U.S.
cryptocurrency exchange, is planning to go public on Wednesday.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
April 13, 2021 07:51 ET (11:51 GMT)
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