Thu, 04/01/2021 – 10:33
E-mini S&P 500 Futures (June): Settled at 3967.50, up 19.75
E-mini Nasdaq-100 Futures (June): Settled at 13,089.75, up 211.50
Yesterday was the session we’ve been waiting for; there was a tech-driven green light across U.S. benchmarks, the Nasdaq broke above a downtrend line from its February 16th all-time high, and the S&P settled at a fresh record. U.S. benchmarks were pointing higher this morning ahead of both the bell and a long weekend. Tomorrow brings Nonfarm Payroll, but the NYSE is closed and index futures only trade through 8:15 a.m. CT due to the Good Friday holiday.
The semiconductor space gained about 2.5% yesterday. Micron beat earnings after the bell and gained as much as 5% overnight. Additionally, Taiwan Semiconductor is up 2.5% ahead of the bell with news it’ll invest $100 billion over the next 3 years, along with President Biden’s announcement that his infrastructure plan will bolster the industry.
As a unit, coupled with Apple and Microsoft responding to massive levels of technical support yesterday, tech could really bring strong leadership. Speaking of Microsoft, yesterday they won a contract worth up to $21.9 billion from the U.S. Army to produce augmented reality devices.
Weekly Jobless Claims, both Initial and Continuing, came in higher than expected. Although better revisions for last week helped offset some of the miss, this coupled with yesterday’s ADP jobs data has encouraged a little unwind of U.S. Dollar and rate strength that came on whispers of a blowout Nonfarm Payroll report tomorrow.
We received final March Manufacturing PMI at 8:45 a.m. CT and the more closely-watched ISM read at 9:00 a.m. Philadelphia Fed President Harker speaks at noon CT and Dallas Fed President Kaplan speaks at 3:05 p.m. CT; neither vote in 2021 or 2022.
Bringing a supportive wave to risk assets is the U.S. Dollar and rates, both are backing off from this week’s highs. Yesterday, President Biden unveiled his infrastructure spending plan and highlighted costs coming from tax hikes. We pointed to the White House’s plan to raise corporate taxes from 21% to 28% and increase the personal tax rate to 39.6% for households earning more than $400,000.
There’s certainly opposition, even from Democrats in New York and New Jersey who want the cap on SALT dropped. Still, for the time being, with the idea of less debt to fund spending, it’s brought support to the Treasury complex. This has tightened the spread between U.S. and German 10-Years by about 2 basis points. Additionally, firm Manufacturing PMI from both Europe and the UK earlier this morning has weighed on the U.S. Dollar.
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