(Bloomberg) — U.S. equity futures were little changed, erasing earlier gains, as investors weighed Washington’s assessment of a recovery in the world’s largest economy. Oil turned lower after a rally spurred by the blockage of the Suez Canal fizzled.
Contracts on the Nasdaq 100 index held on to minor gains, signaling a potential recovery for tech stocks caught on the losing end of a rotation into cyclical re-opening trades Wednesday. Futures on the S&P 500 Index and Dow Jones Industrial Average slipped.
In the premarket, Nike Inc. lost 4% as the company risked a boycott in China over its practice of not sourcing cotton from the contentious Xinjiang region. Carnival Corp. rose from its worst three-day slump since November on prospects for the return of cruise-line operations.
West Texas Intermediate crude fell below $60 a barrel, after adding almost 6% Wednesday. Tugs and diggers are trying to dislodge the ship stuck for a third day in the Suez Canal, a critical waterway for trade.
Attention is turning to Thursday’s seven-year Treasury auction to gauge the direction of bond yields, as poor demand for this maturity at last month’s sale helped trigger a global selloff in government debt and interest-rate sensitive stocks. U.S. benchmark 10-year yields were steady around 1.6%.
Investors are mulling which sectors of the stock market are best-placed to benefit from faster growth, while monitoring the risks of higher inflation. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell balanced their positive assessments of the recovery with reminders that it still has a long way to go in a second day of Congressional testimony.
“The reflation trade will have further legs to run,” Lale Akoner, BNY Mellon Investment Management senior market strategist, said on Bloomberg TV. “We do see higher inflationary pressures building, higher interest rates and softer dollar to continue.”
In Europe, concern over lockdown extensions and vaccine hiccups is keeping cyclical stocks on the back foot, with energy firms and banks among the biggest contributors to the slight loss on the Stoxx Europe 600 index.
Meanwhile, the U.S. Securities and Exchange Commission has started an inquiry into the the blank-check company frenzy that’s gripping Wall Street, according to a report. Elsewhere, Bitcoin fell as much as 4.7%, to the lowest in about two weeks. The fifth-day decline in the cryptocurrency is its longest stretch this year.
These are some key events to watch this week:
The U.S. Treasury auctions seven-year debt.U.S. personal income and spending data on Friday.
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