Stock Futures Rise Ahead of Yellen's Testimony
By Anna Hirtenstein
U.S. stock futures climbed ahead of a slew of earnings releases
and testimony by Janet Yellen in which she is expected to support
higher coronavirus relief spending.
Futures tied to the S&P 500 rose 0.6%, pointing to a rally
after the opening bell. Those linked to the Nasdaq-100 added 0.9%,
suggesting gains in tech stocks.
Earnings season kicks into high gear Tuesday, with Goldman Sachs
and Bank of America scheduled to release their results before
markets open. Netflix is expected to report after hours.
Ms. Yellen is scheduled to speak before the Senate Finance
Committee at 10 a.m. ET, which will vote on her nomination for
Treasury Secretary. According to a copy of her prepared remarks,
she plans to tell lawmakers that the U.S. risks a longer, more
painful recession unless Congress approves more aid, and to
encourage them to "act big" to shore up the recovery.
President-elect Joe Biden unveiled a plan for a $1.9 trillion
fiscal stimulus package last week, which would include direct
payments of $1,400 to most households and spending on vaccine
distribution. Passing it through Congress is one of the first major
tests for the incoming leader, who will be inaugurated
Ms. Yellen will be the "holder of the keys of unprecedented
spending," said Ludovic Subran, chief economist at Allianz. "It
will be reassuring for people to see she's very pragmatic in the
way that she addresses the crisis, similarly to how she was in her
role at the Fed."
Stock markets have begun the week on an optimistic note, as
accelerated Covid-19 vaccine rollouts begin to offset concerns
about the spread of the virus.
Overseas, the pan-continental Stoxx Europe 600 rose 0.2%.
Jeep-owner Stellantis, the recently combined business of Fiat
Chrysler and PSA Group, gained close to 5%, extending Monday's pop
after it made its debut on French and Italian exchanges. The
company's shares on the New York Stock Exchange will start trading
Meanwhile, investors are watching for the results of a vote of
confidence in the Italian Senate, which will determine whether
Prime Minister Giuseppe Conte is able to continue governing or
The muted reaction in Italy's government bonds shows the massive
impact of European Central Bank stimulus and its ability to keep
markets stable, Mr. Subran said. The yield on the Italian 10-year
bond edged down to 0.625% from 0.633% Monday.
"We tend to believe the coalition will reform, we still think
it's something that can be saved. But it's also revealed the
fragility of the coalition," said Mr. Subran.
In Asia, most major benchmarks rose. Hong Kong's Hang Seng Index
advanced 2.5% and Japan's Nikkei 225 index added 1.4%, led by
shares of tech and car companies. The Shanghai Composite Index
Chinese real-estate developer China Evergrande surged nearly 16%
after it said it has arranged funds for early repayment of 16
billion Hong Kong dollars of bonds, equivalent to $2.1 billion,
easing concerns over its financial health.
In U.S. bond markets, the yield on the benchmark 10-year
Treasury note rose to 1.110% from 1.097% Friday, with the market
closed Monday for Martin Luther King Jr. Day.
Write to Anna Hirtenstein at email@example.com
(END) Dow Jones Newswires
January 19, 2021 05:40 ET (10:40 GMT)
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