Stock Futures Pause Ahead of Inflation Data
By Anna Hirtenstein
U.S. stock futures held steady Tuesday ahead of fresh data that
is expected to show consumer prices climbed sharply in March.
Futures tied to the S&P 500 wavered between gains and
losses. The broad-market index is hovering near its recent record
closing high. Futures on the technology-heavy Nasdaq-100 were also
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 U.S. consumer price data for March is due out at 8:30 a.m.
"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
In bond markets, the yield on the 10-year Treasury note ticked
up to 1.693%, from 1.674% on Monday, climbing for the third
consecutive trading session. 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.
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
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
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
Bitcoin rose nearly 3% to a record, trading close to $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 firstname.lastname@example.org
(END) Dow Jones Newswires
April 13, 2021 05:16 ET (09:16 GMT)
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