Stock Index Futures Muted as Bond Yields Tick Higher Amid Easing Banking Fears

June S&P 500 futures (ESM23) are down -0.10%, and June Nasdaq 100 E-Mini futures (NQM23) are down -0.20% this morning after the Dow and S&P 500 closed in the green on Monday as a buyout deal for the failed Silicon Valley Bank calmed investor concerns about the banking sector, while a rise in U.S. Treasury yields weighed on the tech-heavy Nasdaq 100.

In Monday’s trading session, First Citizens BancShares (FCNCA) surged over +53% after it agreed to acquire the loans and deposits of collapsed Silicon Valley Bank, fueling a recovery in financial stocks. Also, First Republic Bank (FRC) climbed over +11% following a Bloomberg report that U.S. authorities were mulling an expansion of the emergency lending facility for banks. Meanwhile, energy stocks led sectoral gains as the prices of WTI crude oil rose over +5% on Kurdistan export halt and banking optimism. At the same time, the tech-heavy Nasdaq 100 underperformed as a jump in Treasury yields pressured rate-sensitive technology and other growth stocks. 

“The important thing is that various institutions in the U.S. and Europe continue to display the ability to rapidly and decisively deal with the fallout from recent turbulence and contain it before it worsens,” said Craig Erlam, a senior market analyst at OANDA. 

Federal Reserve Governor Philip Jefferson said Monday that the U.S. central bank would try to avoid harming the U.S. economy any more than necessary. “The current inflation rate is too high. It is the goal of the Federal Open Market Committee to get it back down to 2%, in a way that is sooner as opposed to later,” he said. Jefferson also noted that stress among small banks could hit small businesses hardest.

Today, all eyes are focused on the U.S. CB Consumer Confidence data in a couple of hours. Economists, on average, forecast that March CB Consumer Confidence will stand at 101.0, compared to the previous value of 102.9.

Also, investors are likely to focus on the U.S. Goods Trade Balance, which was at -91.09B in January. Economists foresee the new figure to be -91.00B.

U.S. S&P/CS HPI Composite - 20 n.s.a. will be reported today. Economists foresee this figure to stand at +2.5% y/y in January, compared to the previous number of +4.6% y/y.

In the bond markets, United States 10-Year rates are at 3.564%, up +1.02%.

The Euro Stoxx 50 futures are up +0.27% this morning, continuing positive momentum as confidence returns to the region’s stock markets after the recent turmoil in the global banking sector. Bank of England Governor, Andrew Bailey, said Monday night that he had confidence in the U.K. banking system and regulatory framework, describing U.K. banks as “resilient and well placed to support the economy.” Meanwhile, shares of UBS Group Ag (UBSG.Z.IX) rose over +1% after the lender’s CEO Ralph Hamers said the bank sees its takeover of Credit Suisse as a growth opportunity. Also, Telecom Italia (TIT.M.DX) rose about +2% after Bloomberg News reported that the company is working on a higher bid for its landline network.

France’s Business Survey, Italy’s Business Confidence, and Italy’s Consumer Confidence data were released today.

The French March Business Survey stood at 104, stronger than expectations of 103.

The Italian March Business Confidence came in at 104.2, stronger than expectations of 102.5.

The Italian March Consumer Confidence was at 105.1, stronger than expectations of 104.0.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.19%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.15%.

China’s Shanghai Composite today closed lower as a slew of weak earnings reports from China’s biggest companies, including China Petroleum & Chemical Corp and China Hongqiao Group Ltd, drummed up doubts over a quick economic rebound this year. In addition, local media reports suggested that China’s export sector was running well below capacity amid weak domestic and overseas demand caused by worsening economic conditions worldwide. On the positive side, Rongsheng Petro Chemical Co. jumped about +10% after energy giant Saudi Arabian Oil Co. agreed to acquire a 10% stake in the Chinese refinery for 24.6 billion yuan ($3.6 billion). Investor focus is now squarely on Chinese PMI data due later in the week.

At the same time, Japan’s Nikkei 225 Stock Index closed slightly higher today, led by gains in energy and financial stocks as concerns eased about the banking crisis. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 0.37% to 19.01.

Pre-Market U.S. Stock Movers

Bank stocks are extending recovery, with First Republic Bank (FRC) rising more than +4% in pre-market trading. Also, PacWest Bancorp (PACW) and Western Alliance Bancorp (WAL) are up more than +1%.

PVH Corp (PVH) climbed more than +12% in pre-market trading after the company reported better-than-expected Q4 results and posted upbeat FY23 guidance.

LYFT Inc (LYFT) gained over +3% in pre-market trading after the ride-sharing firm selected board member David Risher as its new CEO.

Freightcar America Inc (RAIL) plunged more than -7% in pre-market trading after the company reported mixed Q4 results and said it would issue about 85K shares of new non-convertible preferred stock to repay in full its outstanding term loan debt.

Geron Corporation (GERN) fell over -1% in pre-market trading after Goldman Sachs initiated coverage on the stock with a neutral rating and a $3 price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - March 28th

Micron (MU), Lululemon Athletica (LULU), Walgreens Boots (WBA), McCormick&Co (MKC), Synnex (SNX), Elbit Systems (ESLT), Jefferies Financial (JEF), Futu (FUTU), Core Main (CNM), Cal-Maine (CALM), Progress (PRGS), Ncino (NCNO), IHS Holding (IHS), Curaleaf (CURLF), Dave & Buster’s Entertainment (PLAY), John Wood (WDGJF), Galaxy Digital (BRPHF), Somalogic (SLGC), Burning Rock (BNR), biote Corp (BTMD), Emeren DRC (SOL), Aadi Bioscience (AADI), PDS Biotech (PDSB), ProPhase Labs (PRPH), Galiano Gold (GAU).

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