U.S. Futures Rise After Tech Slide

05/05/2021 U.S. equity futures are high and Asian stocks steady after U.S markets dipped overnight on a technology selloff and Treasury Secretary Janet Yellen’s comments on interest rates. Yellen said rates will likely rise as government spending ramps up and the economy responds with faster growth — comments that economists regarded as self-evident. In a subsequent interview, the former Federal Reserve Chair said she wasn’t predicting or recommending rate hikes. Commodities rose to their highest levels in almost a decade as the rebound from the pandemic fuels demand. Copper climbed back above $10,000 a ton and oil traded above $66 a barrel.

Locally the all share fell for a fourth session with Naspers and Prosus both falling the most in weeks, the All Share closed down 0.62% at 66174, Industrial and Property sectors were hardest hit closing down 1.18 and 1.67 percent respectively. We should be in for a mixed start as U.S markets closed well off their lows, Asia is mixed but Tencent is down 1.69% on the back of the tech sell off. IG Top 40 Index is all over the place but is currently up 60 points.
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MTN announced a strong and resilient operational and financial performance in the first quarter of 2021, with growth in service revenue exceeding medium-term guidance, driven by gains in data and fintech revenue. In constant currency terms, service revenue grew by 17.8% to R42.3 billion at end-March 2021, earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 21.3% and the EBITDA margin widened to 44.2% from 42.7%.
ECONOMIC DATA:
9:15am: April Standard Bank South Africa PMI, est. 50.5, prior 50.3
European stocks are expected to open higher as investors digest a fresh round of corporate earnings and key economic data out of the euro zone. Britain’s FTSE 100 is set to climb around 39 points to 6,962, Germany’s DAX is expected to gain around 97 points to 14,953 and France’s CAC 40 is seen around 16 points higher at 6,268, according to IG data. Final composite and services PMI readings for April are due out of Italy, Germany, France and the wider euro zone on Wednesday morning, offering an insight into the state of the common currency bloc’s economic recovery. Euro zone producer prices for March will also be published.
In the U.S the S&P 500 wiped out Monday’s gains, dropping 0.7%. The Dow ended the day up about 20 points after dropping more than 300 points in early trade.at one point. Investors exited technology and growth stocks, pushing the Nasdaq Composite down 1.9% or 261 points, shares in Netflix lost 1.2%, and Microsoft dropped 1.6%. Amazon and Facebook shed 2.2% and 1.3%, respectively. Apple dropped 3.5% and Alphabet fell 1.6%. U.S. equities hit lows of the day following Treasury Secretary Janet Yellen’s comments that interest rates may have to rise somewhat to keep economy from overheating. Private payroll data will also be released at 14;15. Economists polled by Dow Jones are expecting 800,000 private jobs added in April, compared to the 517,000 in March, according to ADP. These numbers come ahead of Friday’s closely-watched jobs report.
Asian markets are mixed again after the tech sell off in the US, Australia’s ASX 200 traded up 0.41% with the heavily-weighted financials subindex up 0.84%. Energy and materials were up 0.9% and 1.2%, respectively as major miners and oil stocks mostly advanced. The Hang Seng is 0.53% lower with Tencent down 1.69%. Markets on the Chinese mainland and Japan remain closed for public holidays. South Korean markets are also shut.
Oil prices rose on Tuesday after more U.S. states eased lockdowns and the European Union sought to attract travellers, though soaring COVID-19 cases in India capped gains. Brent + 0.87% $ 69.48, WTI + 0.87% $ 66.26.
Palladium soared to a record high on Tuesday on worries over short supplies of the metal used in emissions controlling devices in automobiles, the metal traded as high as $ 3018 an ounce. Gold fell 1% after U.S. Treasury Secretary Janet Yellen said interest rates may need to rise and is currently at $ 1778 an ounce. Silver fell 2% to $26.34 per ounce, after hitting its highest since Feb. 26, while platinum dipped 0.29%, to $1,235.
Copper rallied back above $10,000 a ton as prospects for a global economic rebound from the pandemic fuels a boom in commodities. The global copper market will flip into a deficit this year as demand jumps 6%, outstripping growth in supply, according to Bank of America Corp. The bank said a spike to $13,000 was possible as inventories run low, but growing supply of scrap should help bring the market back into balance by 2023.