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Senate Passes Stimulus Bill, China Slumps, Attack on Saudi - What's up in Markets

EconomyMar 08, 2021 06:31AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- The U.S.'s $1.9 trillion stimulus package is set to be formally approved this week after the Senate passed it with minimal amendments on Saturday. Bond yields are on the rise again as a result, and stocks are set to open lower. China's tech wreck continues as the market digests the implications of a relatively low growth target for this year, while oil prices have spiked following an attack by Yemeni rebels on Saudi Arabian oil facilities. Here's what you need to know in financial markets on Monday, March 8th.

1. Senate passes stimulus package

The  U.S. Senate passed the $1.9 trillion stimulus package, with minor amendments. The bill returns to the House of Representatives on Monday and may be voted through in its amended form on Tuesday, according to various reports.

The Senate left most of the package unchanged but trimmed plans for weekly unemployment benefits to $300 from an initial $400. The benefits will also now end in September, a month earlier than foreseen earlier. The proposal for a $15/hour federal minimum wage had been withdrawn at an earlier stage.

Despite some grumbling from the left wing of the party, the bill is expected to pass its second vote in the House and be signed into law later this week.

2. China's tech wreck continues; copper also weakens

The bubble in Chinese tech stocks continued to deflate overnight, with the Shanghai Shenzhen CSI 300 falling over 3% as the implication of the Communist Party’s relatively low growth target for 2021 sank in. The country’s main tech index fell below its 100-day moving average in the process.

China’s government had indicated a growth target of around 6% on Friday after its annual agenda-setting National People’s Council. That was well below the prevalent 8% forecasts and implies a significant withdrawal of stimulus this year to rein in perceived excess leverage. China’s banking regulator warned of bubbles in global financial markets last week, in what was taken as coded warning about overvaluation of assets at home too.

There were also signs of weakness in other China-driven markets overnight, with copper futures falling around 1%, despite data showing a strong performance by both imports and exports in the first two months of the year.

3. Stocks set to open lower as yield concerns return

U.S. stocks are set to open lower, giving up some of the gains that they made in Friday’s surge as concerns about rising bond yields return to the fore.

By 6:30 AM ET (1130 GMT), Dow Jones futures were down 58 points, or 0.2%, while S&P 500 futures were down 0.7% and Nasdaq 100 futures were down 1.6%..

All three had risen strongly in reaction to the stronger-than-expected labor market report, which showed an instant impact on the services sector from the lifting of Covid-19-related restrictions on business and social gatherings.

Stocks likely to be in focus later include General Electric (NYSE:GE) and AerCap (NYSE:AER), after weekend reports that GE intends to sell its GECAS aircraft leasing business in a deal valued at $30 billion, including debt.

4. Amazon (NASDAQ:AMZN)'s food delivery startup Deliveroo confirms London IPO plans

Deliveroo, the U.K.-based food delivery business backed by Amazon, among others, confirmed plans for an initial public offering in London, one of a flurry of deals that is coinciding with a move by the City to shore up its competitiveness as a financial marketplace in the aftermath of Brexit.

The Financial Times reported that the company is targeting a valuation of $10 billion, after a year in which its top line grew by 54% to 1.2 billion pounds last year ($1.7 billion), profiting from a pandemic that forced restaurants and diners to depend on delivery services to a degree that was both unprecedented and, some argue, unlikely to be repeated.  Shares in its main European rival, Just Eat Takeaway, have fallen by over one-third since Pfizer (NYSE:PFE) and BioNTech announced their vaccine breakthrough in November.

Deliveroo's figures indicated that it was profitable at an EBITDA level only for two quarters of the year. It indicated it expects to keep posting net losses for some time as it prioritizes growth. The company had a net loss of 224 million pounds last year. 

5. Oil pushes above $70 after attack on Saudi facilities

The price of oil spiked above $70 after Houthi rebels in Yemen launched a combined drone-and-missile strike against various oil industry facilities in Saudi Arabia. In contrast to the strike on the Abqaiq facilities two years ago, there was no significant damage to the facilities and no loss of life.

Saudi Aramco (SE:2222) said that the operations of the facilities hadn’t been affected.

The news reassured a market that is already at elevated levels, prices having hit their highest in over a year last week after OPEC and its allies surprisingly decided against a significant rise in output in April.  By 6:30 AM ET, both benchmark futures contracts had come off their highs.  U.S. crude futures were up 0.3% at $66.27 a barrel, while Brent crude was up 0.2% at $69.50 a barrel.

 

Senate Passes Stimulus Bill, China Slumps, Attack on Saudi - What's up in Markets
 

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Comments (16)
ANIMESH GAUTAM
ANIMESH GAUTAM Mar 08, 2021 8:21AM ET
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price going up , where is the demand.
John Brauns
John Brauns Mar 08, 2021 8:21AM ET
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not here
KING KONG
KING KONG Mar 08, 2021 7:57AM ET
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seems like more covid death and more job lost will bring market up...it was like that a few months ago..
John Brauns
John Brauns Mar 08, 2021 7:54AM ET
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who cares
Shaishav Shah
Shaishav Shah Mar 08, 2021 7:54AM ET
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Hope this week valuation correct
Joanna Yin
Joanna Yin Mar 08, 2021 7:46AM ET
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All is about center bank policy. Chinese stock down is due to center bank slow down the print machine. 6% target is trying to export inflation too?
Phil Ht
Phil Ht Mar 08, 2021 7:43AM ET
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Thank God they didn’t cut money for gender studies in Pakistan.
Amon Inv
Amon Inv Mar 08, 2021 7:42AM ET
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2 months in and Democrats are realizing their huge mistake in the election
Viking Fire
Viking Fire Mar 08, 2021 7:40AM ET
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The disaster trump left this country in is tough. I miss when republicans didnt vote in nut jobs who destroy the economy every time. So many decades ago. So many decades of constant failures.
skriller bee
skriller bee Mar 08, 2021 7:40AM ET
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you mean when the republican party was made up of the progressives and liberals of today(democrats today), pre nixon era?
Fred Diebold
Fred Diebold Mar 08, 2021 7:30AM ET
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The left is in charge ...........meaning nothing rational is coming, it is all socialist/communist agenda coming.
Viking Fire
Viking Fire Mar 08, 2021 7:30AM ET
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Were you sleeping the last 4 years lol. The extreme right, once again, destroyed the economy. The center is the only place for success but all you extremists left and right need to grow up
Mike Wellons
Mike Wellons Mar 08, 2021 7:30AM ET
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So you want to defund the police? Isn't that ironic ... law enforcement is one of those socialist programs you so despise. Other socialist programs ... Social Security, Judicial system, Public schools, Supreme Court, etc ... which ones do you find so offensive?
Mark Buzaglo
Mark Buzaglo Mar 08, 2021 7:30AM ET
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Viking Fire rise interest rate meaning pay more for your credit cards debt, pay more for morgages, industry pay more for money lending, you pay more for food, thats inflation, dems are creating inflation,
Darryl Allen
Darryl Allen Mar 08, 2021 7:30AM ET
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Socialism is a system of centralized economic planning. Law enforcement and the judicial system are not "socialist programs".
Mark Buzaglo
Mark Buzaglo Mar 08, 2021 7:25AM ET
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Hight interest rate, create inflation, market down, poor people pays, thanks dems.
jordan lee
jordan lee Mar 08, 2021 7:25AM ET
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You hike the interest rates to stop inflation same with the yields on the bonds. To tighten the money supply
Mark Buzaglo
Mark Buzaglo Mar 08, 2021 7:25AM ET
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Hight interest rate, you pay more for credit cards debt, pay more for mortgage, pay more for food, that’s inflation
Duckman Co
Duckman Co Mar 08, 2021 7:06AM ET
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Shorts has covered all they could. They get anither crack at it
Gregory Me
Gregory Me Mar 08, 2021 6:59AM ET
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The Biden era...power hungry goofballs in charge.
Josh Modern
JoshModern Mar 08, 2021 6:59AM ET
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biden is power hungry? LOL
milena villa escobar
milena villa escobar Mar 08, 2021 6:59AM ET
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Josh Modern  good point Josh,  the man can barely find his way to the bathroom
Kitty Monkey Lisa
Kitty Monkey Lisa Mar 08, 2021 6:54AM ET
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someone ******up their own oil machine. same peoole crash the stock market and pass the bill to buy the dip.the biggest vaccine dealer is also the same person who created the virus.
Elvis Durant
Elvis Durant Mar 08, 2021 6:54AM ET
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that We know....
Papan Ghosh
Papan Ghosh Mar 08, 2021 6:52AM ET
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Bond yield is priced and so are retail investors.
Papan Ghosh
Papan Ghosh Mar 08, 2021 6:51AM ET
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Bond yield is priced and so are retail investors hehe
Gustavo Lopez
Gustavo Lopez Mar 08, 2021 6:38AM ET
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Most of it made up stuff. Market will go up whenever they feel like it.
 
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