Treasury Yields, S&P 500 Futures Depict Market Indecision, US Economy Expected

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  • 10-year US Treasury yields are reluctant to extend the recent pullback, S&P 500 futures remain sluggish despite the bullish Wall Street close.
  • Doubts about the availability, effectiveness of vaccines / pills join the lockdown of China to weigh on risk appetite, hopes of recovery prevail.
  • US durable goods orders, PCE Inflation for November will be key to short-term direction.
  • Also important are Omicron updates and US BBB news.

After two consecutive days of risk, market sentiment weakened early Thursday.

While describing the mood, 10-year US Treasury yields hovered around 1.457% after falling for the first time in three days on Wednesday, while the S&P 500 Futures struggled to copy Wall Street’s gains, up 0.05% to around 4,687 at press time.

It should be noted that new challenges to previously positive risk catalysts and a cautious mood ahead of key US data appear to be testing optimists on a light timeline.

Among the negatives, the largest lockdown on record in China, of around 13 million people in Xi’an, as reported by the Wall Street Journal (WSJ), is drawing attention. On a related note, the White House is concerned about the availability of Pfizer’s pill to combat the Omicron which recently gained US Food and Drug Administration (FDA) approval. In addition, the Financial Times (FT) said: “France canceled its drug order from Merck on Wednesday after data showed it only resulted in a 30% reduction in the risk of hospitalization and death. deaths, significantly lower than previous expectations, ”also challenged the previously optimistic market mood.

It should be noted, however, that the White House’s optimism about US President Joe Biden’s Build Back Better (BBB) ​​stimulus package is likely fighting the bears. Additionally, Japan’s positive GDP revision and push for a record budget joins the US military’s progress to have one cure for all viruses and variants, not to mention studies showing Omicron has one less hospital stay. wingspan, to keep the bulls hopeful.

Going forward, markets are expected to remain divided as traders approach Christmas Eve in light volume. However, PCE inflation in the United States and durable goods orders for November may entertain dynamic traders. The aforementioned risk catalysts, such as Omicron news and US stimulus updates, are also important.

Read: The dollar drops widely as risk sentiment returns to the upside in US stocks

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