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Biden Drives Yields Up, Tech Reversal, China Fines - What's up in Markets

EconomyMar 12, 2021 06:55AM ET
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© Reuters

By Geoffrey Smith 

Investing.com -- President Joe Biden’s address pushes bond yields higher, China’s tech giants sell off after a warning shot from Beijing, and AstraZeneca (NASDAQ:AZN)’s vaccine runs into more problems. Here’s what you need to know in financial markets on Friday, March 12th.

1. Biden signs stimulus package, targets July 4 ‘Independence Day’ from virus

U.S. President Joe Biden signed the $1.9 trillion stimulus package into law, a day earlier than expected, and signaled an acceleration in the national vaccination campaign, targeting a return to normal life in time for the July 4 holiday.

In a televised address, Biden urged states to make all U.S. adults eligible for vaccine shots by May 1, an aim that dovetails with earlier comments about wanting all adults vaccinated by the end of that month.

The comments appeared to solidify faith in a U.S. economic recovery this year, pushing the dollar and U.S. bond yields higher.

By 6:30 AM ET (1130 GMT), the yield on the benchmark 10-Year note was back at 1.61%, its highest since February last year. The dollar index, moving in tandem as usual, rose 0.6% to 91.93, with gains against both commodity currencies and havens such as the Swiss franc .

2. Global stocks, euro tumble 

The reversal in Treasury yields undermined the rally in global stocks, pushing both U.S. futures into the red in early trade on Friday. Chinese and Japanese markets escaped the worst of the selling, which started only late on in the Asian session, but Indian and European markets were all lower by 6:30 AM ET.

The EUR/USD has struggled in the last 24 hours on a number of accounts: the European Central Bank’s press conference on Thursday underlined that the yield premium on U.S. assets is likely to widen in the short term, as the ECB steps up its bond purchases. Moreover, most of the EU, with the exception of Spain and Portugal, is now experiencing a clear pickup in Covid-19 cases, casting doubt over the further reopening of the economy.

By 6:30 AM ET, the euro was down 0.5% at $1.1922.

3. Stocks set to open lower; DocuSign, Ulta, Michigan consumer sentiment eyed

U.S. stocks are set to open lower later, but are still on course for a positive week after Biden’s address.

By 6:35 AM, the  NASDAQ Futures contract was off its overnight lows but still down 1.5%, after gaining 2.5% on Thursday. The S&P 500 futures contract was down 0.5% and the Dow Jones futures contract was outperforming with a negligible loss of only 13 points.

Stocks likely to be in focus later include Ulta Beauty (NASDAQ:ULTA), which was marked down 10% in premarket trade after publishing disappointing results after the close on Thursday.

DocuSign stock (NASDAQ:DOCU) was also marked down by over 4%, despite beating forecasts both for the last quarter, and for its guidance for the coming quarter.

The data calendar ends the week on a light note, with producer price inflation data due at 8:30 AM ET and the Michigan Consumer Sentiment index at 10 AM.

4 AstraZeneca's woes; Novavax revels in test results

More countries halted the distribution of AstraZeneca’s Covid-19 vaccine, amid fears that it may be connected to blood-clotting problems that have led to at least one death. Denmark and Austria suspended the use of the drug on Thursday, followed by Norway and Iceland. They’ve now been followed by Estonia, Latvia, Lithuania, Bulgaria and Luxembourg and by Thailand, the first Asian country to do so.

Making matters worse, Reuters reported on Thursday that AstraZeneca’s plans to reduce a shortfall in deliveries to the EU by exporting from the U.S. had been stymied by officials in Washington.

By contrast, Novavax Inc (NASDAQ:NVAX) stock made further gains in premarket after a late-stage trial showed it was 96% effective against the original strain of the Covid-19 virus and 86% effective against the recent ‘British’ strain.

5. Chinese tech hit by regulatory warning shot

Chinese technology giants sold off after antitrust authorities issued a raft of fines relating to their past M&A activity.

The regulators fined Tencent Holdings (OTC:TCEHY), ride-hailing company Didi Chuxing, search giant Baidu (NASDAQ:BIDU) and Byte Dance, the parent company of TikTok.

The fines, while small in their absolute size, were taken as a warning shot against the companies whose financial clout is reportedly seen by some in Beijing to the authority of the Communist Party. ADRs of Tencent, Baidu and Alibaba (NYSE:BABA), whose founder Jack Ma has also had recent run-ins with regulators in recent months, were all marked down in premarket trading.

Biden Drives Yields Up, Tech Reversal, China Fines - What's up in Markets
 

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Comments (22)
Viking Fire
Viking Fire Mar 13, 2021 2:39AM ET
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So nice to have a real president rather than the terr/orist manbaby gopq installed and still worship.
Ridha B younes
Ridha B younes Mar 13, 2021 12:28AM ET
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Fed Austin Powellovic was driving the yield tracks
Ridha B younes
Ridha B younes Mar 13, 2021 12:28AM ET
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*truck
Rick Baier
Rick Baier Mar 12, 2021 5:41PM ET
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Read the stimulus package. two to three million for gender studies in Pakistan. these are your Democrats on display how much money going to bailout Democratic failed cities. over 200 billion read the package.
Rick Baier
Rick Baier Mar 12, 2021 5:39PM ET
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I thought it would take him 6 months to put the country finances 10 years back in the past well he far exceeded my expectations
Viking Fire
Viking Fire Mar 12, 2021 3:32PM ET
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So nice to have a real president rather than that man baby gopq terr/orist trump that destroyed so many families convincing them to attack the capital
Casador Del Oso
Casador Del Oso Mar 12, 2021 3:32PM ET
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Lyndon Baines Johnson was the worst president. He sent our boys to Vietnam and left them to rot by not seeking a second term.
Shane Gg
Shane Gg Mar 12, 2021 3:32PM ET
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Casador Del Oso  Come on... everyone knows Jimmy Carter was the worst until BHO came along. Johnson was like 3rd or 4th. You wouldn't believe some of the crazy stuff LBJ did right in the WH though. I doubt my comment would get posted if I typed it. I suggest reading the book, "In the President's Secret Service: Behind the Scenes with Agents in the Line of Fire and the Presidents They Protect" by Ronald Kessler. It's really good.
Rick Baier
Rick Baier Mar 12, 2021 3:32PM ET
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Casador Del Oso . Yes and Lyndon B Johnson ordered the ****of John F Kennedy.
Darryl Allen
Darryl Allen Mar 12, 2021 3:16PM ET
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The election was obviously rigged. The legitimacy of a mail in ballot is in no way verifible. Legitimate verification ALWAYS requires you to show up in person with ID, sometimes multiple types. RIP America 🇺🇸
Henrik Lindberg
Henrik Mar 12, 2021 12:51PM ET
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Biden is trash
Sudip Basnyat
Sudip Basnyat Mar 12, 2021 12:09PM ET
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Look at History the day Trump signed Market started its Bull Run.. Investors adjusted to COVID and took stocks to new highs .. They will adjust to 10yrs Yeild .. New standards for 10yr will be 2.0 pretty soon.. Then there will be another post that will say How Biden’s Bill helped the economy.. Typical Media ..
John Swartz
John Swartz Mar 12, 2021 12:09PM ET
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quick search... March 9, 2009, as the beginning of the current bull market
Frederick Chotsky
Chotsky Mar 12, 2021 11:48AM ET
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If the 10 yr yield remains higher than the SPY dividend, the valuation models will all collapse
Dave Jones
Dave Jones Mar 12, 2021 11:24AM ET
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biden being manipulated is elder abuse!
Rod Deh
Rod Deh Mar 12, 2021 11:18AM ET
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market won't crash .. we just put another 2T into the economy. where will that money go? into savings? LOL
David Ripke
David Ripke Mar 12, 2021 11:18AM ET
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Thats what ive been doing with my unemployment. Everyone i know has either spent most of theirs or only has a little bit left. Meanwhile I saved nearly $30k (some of it from good investing) mostly from my unemployment. Ive been paid $20k in unemployment and i banked nearly all of it. So when thre economy collapses ill be okay for a little bit. If it doesnt ill have a decent chunk.
Bret Lafrance
Bret Lafrance Mar 12, 2021 10:46AM ET
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market has been inflated to bursting point through relentless Fed bond buying over the past 12 months, Fed bought 100% of T bonds issued last tear... and other junk bonds... do the math - without a healthy dose of inflation this bubble bursts now
Dave Jones
Dave Jones Mar 12, 2021 10:46AM ET
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its MathS. Short for Mathematics. People who do math must also do physic and calculu.
Shane Gg
Shane Gg Mar 12, 2021 10:46AM ET
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Dave Jones  Thank for that Dave... I just always thought MathS meant as in plural. Now that I know that, I'll be using the term far more often. By the way... I thought it was "Calculi"? Haha
John Swartz
John Swartz Mar 12, 2021 10:46AM ET
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How to use math and maths. The only difference between math and maths is where they're used. Math is the preferred term in the United States and Canada. Maths is the preferred term in the United Kingdom, Ireland, Australia, and other English-speaking places.
Tarang Shah
Tarang Shah Mar 12, 2021 9:28AM ET
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US 10Y will welcome US Markets while opening at a fresh 52 week high! Powell and Yellen are ready to get abscond
Daniel Ese
Daniel Ese Mar 12, 2021 8:37AM ET
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please I want to ask what's the effect of Biden's speech on Us Dollar ?
Jon Bal
Jon Bal Mar 12, 2021 8:37AM ET
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up when everyone dumps their stocks for dollars then down when everyone dumps their dollars for gold & oil
Daniel Ese
Daniel Ese Mar 12, 2021 8:37AM ET
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thanks Jon Bal
Matt Kay
Matt Kay Mar 12, 2021 8:26AM ET
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I keep blocking and blocking these trump bots but they keep coming and coming =/
The Man
The Man Mar 12, 2021 8:26AM ET
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Truth prevails
Chris Fran
Chris Fran Mar 12, 2021 8:26AM ET
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lies spreads like a virus which "will miraculously disappear one day"... lol
Abdirahman Baaruud
Abdirahman Baaruud Mar 12, 2021 8:26AM ET
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it did disappear. right after trump left. very suspicious of the dems.
Gershom Zvi
Gershom Zvi Mar 12, 2021 8:18AM ET
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Summer 2020 10 y bond .6-.7 just gone !!! That’s a shame
Sudip Basnyat
Sudip Basnyat Mar 12, 2021 7:48AM ET
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Where is Trump when we need him to send out a tweet ;)
Austin Braham
Austin Braham Mar 12, 2021 7:48AM ET
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Oh you lookin for Chump? he’s probably out golfing at mar-o-lago, twice impeached, and BANNED from twitter! So good luck looking for him to come raise *****again🤣
Chris Fran
Chris Fran Mar 12, 2021 7:48AM ET
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supid probably getting it on with ivanka.. lol
Notvery Goodathis
Peteymcletey Mar 12, 2021 7:35AM ET
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The same people that canceled independence day last year will celebrate it this year. sheep will be sheep
Cathy Bartlett
Cathy Bartlett Mar 12, 2021 7:22AM ET
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The road to serfdom. Biased media giving empty shell/demented husk a pass...
Forex Trading
Forex Trading Mar 12, 2021 7:13AM ET
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so the bond is down 📉as Treasury 10 yeid goes up 📈 lol it's now gonna buy 📈 nas100
Daniel Ese
Daniel Ese Mar 12, 2021 7:07AM ET
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wow this isn't good
Nate Johnson
Nate Johnson Mar 12, 2021 7:07AM ET
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It's good for my put options hahaha
Daniel Ese
Daniel Ese Mar 12, 2021 7:07AM ET
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meaning USD is going down
Ron Love
Ron Love Mar 12, 2021 7:03AM ET
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Thank You! Ive been trying to tell people that Biden’s speech didn’t go well and he scared bond holders.
Forex Trading
Forex Trading Mar 12, 2021 7:03AM ET
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yes that's true ☺️ once the speech don't go well as we expected that's depreciation.even my friends doesn't understand fundamental news 😹
John Healy
John Healy Mar 12, 2021 7:03AM ET
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Inflation occurs when the supply of currency units is diluted. Inflation concerns move bond yields higher, not Joe Biden or a sound economic recovery. The United States wants to have its cake and eat it too. We can’t. Inflation is inevitable with the monetary and fiscal policies that have existed since the Global Financial Crisis. Hedge now or cry a river later.
Nate Johnson
Nate Johnson Mar 12, 2021 7:03AM ET
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Yep. My put options are going to be golden today. Everything is overvalued. Can't throw money at the stock market to say hey look at the great job I'm doing. Yet the valuations say otherwise. Eventually there will be a correction. Next will be more debt for infrastructure then tax increases. All good for put options.
Daniel Ese
Daniel Ese Mar 12, 2021 7:03AM ET
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which of your option will be golden ?
Daniel Ese
Daniel Ese Mar 12, 2021 7:03AM ET
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Does that means US Dollars will gain strength or will go hawkish ?
 
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