US futures slip as investors digest a rise in borrowing costs, while oil jumps as winter storms batter Texas
- US futures slipped on Thursday morning after a rise in bond yields in recent days.
- WTI oil rose above $61, with US production falling 40% due to extreme cold weather.
US stockswere mixed on Wednesday, with the tech-heavy Nasdaqslipping 0.58%.
US stock futures slipped on Thursday morning as investors weighed a rise in borrowing costs over recent days that could drag on equities
Meanwhile, energy prices jumped as freezing weather continued to pummel
James Orlando, senior economist at TD Securities, said the rise in bond yields reflected expectations of stronger growth and inflation, which makes bond-holders demand higher returns."There has been a lot of good news of late. Congress is expected to pass a near-$2 trillion fiscal package that will put money in the pockets of Americans," he said. "Already over 55 million Americans have received a vaccine."
"Our expectation that yields will move higher is based on our view that GDP will recover to pre-pandemic levels by mid-year and that core inflation will reach 2% by year-end."Some investors worry that stronger growth and inflation may cause the Federal Reserve to raise interest rates, which they say could choke off the recovery. Yet Orlando said: "Though we are optimistic that the economy is on the right track, the Fed will only believe it when it sees it. As a result, we don't expect it to ease off its monetary support anytime soon."
Bloomberg reported that US oil production fell close to 40% as the weather stymied production. Brent crude, the international benchmark, was roughly flat at $64.33, its highest level since January 2020.
Bitcoin was up 0.45% to $51,554, having touched a record high of more than $52,600 on Wednesday evening.
- Hero MotoCorp, Maruti Suzuki, Tata Motors and other stocks to watch out for on May 6
- Over One lakh oxygen concentrators cleared by customs from April 24 to May 4
- Check out who all can travel to the US amidst uncertainty in international travel
- Water shortage might be on the way to worsen Delhi's COVID-19 crisis
- Himachal Pradesh government imposes curfew effective from tomorrow till May 16