From the Wall Street Journal’s “Stock Futures Edge Lower Amid Bank Earnings” posted early Friday:
Treasury yields rose, while stock futures crept lower, as major banks reported earnings and investors awaited data on retail spending.
Money managers will be looking for guidance on how companies are being impacted by the Omicron variant and elevated inflation. Some investors are betting that anticipated interest-rate hikes will fuel profits in financials and make the sector more attractive than tech.
Expectations for a rate rise as soon as March have caused some investors to sell government bonds, pushing up yields and down prices. The yield on the benchmark 10-year Treasury note ticked up to 1.743% Friday from 1.708% Thursday. Rising yields have motivated investors to rotate out of technology stocks that performed well in a low-yielding environment.
“Equity markets will continue to take their cues from the bond market,” said Hugh Gimber, a strategist at J.P. Morgan Asset Management. “What’s becoming clear is the Fed is realizing that inflationary pressures are larger and more broad-based than they previously expected.”
Charts: Yahoo!Finance sees a bearish triple moving average crossover pattern. Max pain stays at $172.50 with a call mountain at $177.50 and a sharp put peak at $155.