US stock futures fell lower on Thursday, although a series of data showed that the economy continues to recover slowly.
Futures related to the S&P 500 fell 0.3%. Nasdaq-100 futures fell nearly 0.8 percent, suggesting a sharp drop in technology stocks after the bell.
Contracts related to the Dow Jones industrial average fluctuate between gains and losses, suggesting that the blue-chip index could be silenced after closing at a record high on Wednesday.
Fresh data on Thursday showed that weekly unemployment claims fell to 730,000 for the week ended February 20, down from the previous week and less than economists had expected. The US economy grew in the fourth quarter at an annual rate of 4.1%. New durables rose 3.4% in January for the ninth month in a row as production continued to recover.
Yet the recent sharp rise in bond yields – which closed at its one-year high on Wednesday – has made some money managers more cautious. These investors weigh the transfer of funds into less risky assets, such as bonds, and into lower-rated stocks than technology companies.
“The market is nervous. Rising bond yields are putting stocks, especially growth stocks, under pressure, ”said Sebastien Gally, a macro strategist at Nordea Asset Management. “There is a slight reduction in risk in general,” he added.
Optimism about the economic recovery is prompting investors to shift funds into stocks that are likely to benefit from the recovery this year. This weighs on the technological actions that drove much of last year’s rally.
“Increasing bond yields triggered this rotation, away from growth stocks and more in favor of valuable stocks,” said Sophie Chardin, a cross-asset strategist at Lombard Odier. “Increasing profitability supports banks, and higher oil prices support energy. This is a change of leadership. ”
The yield on the reference 10-year treasury note reached 1,460% from 1,388% on Wednesday. Government bond yields are rising as investors reduce their holdings of the safest assets.
Investors are also watching closely for signs of rising inflation after large doses of monetary and fiscal stimulus. At the same time, markets have also become cautious, as recent economic data has shown that the recovery is likely to be slow and halt.
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DoorDash and Salesforce.com are due to release their results on Thursday.
Shares popular with Reddit users on the WallStreetBets forum jumped in the last hour of trading on Wednesday, with volatility reminiscent of last month’s activity. In pre-trading, GameStop was up 55% and AMC Entertainment was up 11%.
The moves show that “there is still liquidity and there is a lot of access to speculative bets,” Ms. Chardan said. “We must be prepared to live with this kind of target bubble, but I would not see it as a threat to the global stock market.”
Prior to market opening, Moderna gained more than 3% after announcing a plan to increase the production capacity of Covid-19 vaccines. Best Buy collapsed by 5.4% after saying it expects a slowdown in sales growth in 2021.
Oil prices continued to rise, with Brent crude rising for a fourth day. The international oil index added 0.5% to $ 66.51 a barrel, close to its highest level since January 2020.
The pan-continental Stoxx Europe 600 overseas fell 0.1%.
Among individual stocks, brewer Anheuser-Busch InBev fell nearly 5 percent after its fourth-quarter earnings fell short of forecasts. The British packaging company DS Smith jumped over 6% in reports that rival Mondi is investigating the takeover.
In recent weeks, investors have also been selling European government bonds as they seek higher returns. The yield on French 10-year bonds, which is moving back in price, reached zero for the first time since June and reached 0.024%.
In Asia, most key indicators ended the day up. The Shanghai Composite Index added 0.6% and the Hang Seng Index in Hong Kong rose 1.2%. South Korea’s Kospi index rose 3.5 percent after its central bank kept interest rates at historically low levels.
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