US Open: Tech Rebounds Treasury Auctions In Focus

US stocks are set for a higher open with tech stocks set to outperform after entering correction territory. US bond yields have eased for now but Treasury auctions over the coming days could dictate where yields go from here.

USA (1)

US futures

Dow  futures +0.1% at 31892 (DIA)

S&P futures +1% at 3859 (SPX)

Nasdaq futures +2.3% at 12608 (NDX)

In Europe

FTSE +0.35% at 6741

Dax +0.5% at 14450

Euro Stoxx +0.6% at 3784

Tech rebounds

The Nasdaq futures are pointing to a solid rebound after tanking 2.4% in the previous session and falling into correction territory - closing more than 10% below its closing high on 12th February.

The recent rise in US 10 year bond yields have spoked investors out of high growth tech stocks which are particularly sensitive to interest rate expectations.

However, 10 year treasury yields are easing today to 1.53%, down from 1.62% a fresh post pandemic high struck on Monday.

US treasury auctions

Where bond yields head next depends to a degree on the coming days’ bond auctions and Wednesday’s inflation data. 

The bond auctions kick off with the 3 year today at 18:00. This will be followed by$38 billion of the 10 year treasuries on Wednesday and $24 billion of the 30 year treasuries on Thursday.

Any hint of weak demand or a stronger than forecast CPI reading could see bond yields resume their ascent.

Stocks set to open higher

The easing of treasury yields, soothing words from central banks and intervention from Chinese authorities in China’s stock markets are underpinning equity demand.

The OECD has also upped the global growth forecast to 5.6% from 4.2% thanks to the US stimulus package.

Stocks in focus:

Zoom (ZM) – trades +3.8% pre-market as tech rebounds and after regulatory filings revealed that founder Eris Yuan transferred 40% of his stake to unspecified beneficiaries last week.

GameStop (GME) - +9.8% pre-market and no stranger to big swings in the share price, after announcing that Chewy co founder Ryan Cohen a major GameStop shareholder will lead plans to turn around online sales.

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