Coffee With Greta: 3-Year High for the 10-Year Yield
Editor's Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here.
********
DJIA Futures: -37 (-0.1%)
SPX Futures: -11 (-0.3%)
NASDAQ Futures: -48 (-0.4%)
Good morning friends!
Futures are lower as Treasury yields pop and traders prepare for a big week of earnings.
Let’s get right to it!
10-Year Yield Spikes to Fresh 3-Year High
The 10-year Treasury yield spiked to a new 3-year high this morning as traders continue to assess the inflation picture.
That yield is currently up three basis points to 2.86% after hitting a high above 2.87% earlier today, the highest level since late 2018.
The rally in the bond market comes after the CPI hit the highest level since 1981 in March and the PPI hit a record-high.
CME Group’s FedWatch Tool shows 88.8% of traders expect a 0.5% rate hike at the next Fed meeting in response to that high inflation.
Oil Prices Hold Higher
Oil prices are sitting at nearly three-week highs as Russia continues its attacks in Ukraine.
West Texas Intermediate crude futures are 0.5% higher at $107.50 bbl while Brent crude futures are up 0.7% to $112.50 bbl.
The EU has been discussing a phased-in ban of Russian oil imports but Germany has so far not supported the embargo.
The Biden Administration is resuming selling leases for oil and gas drilling on federal lands.
The Interior Department is set to release a sale notice today for leases to drill on 144,000 acres.
The move comes as the White House has faced increased pressure to give Americans relief from high gas prices.
But experts say it will take at least 6 months to a year for any new drilling to produce additional supply that would impact the price of gas.
Bank of America Gains on Earnings Beat
Bank of America (BAC) shares are up 0.9% ahead of the open after topping Q1 expectations.
The bank reported earnings of $0.80 per share on $23.33 billion in revenue.
That was better than analysts’ expectations for earnings of $0.75 per share on $23.2 billion in revenue.
Net loan charge-offs dropped 52% year-over-year to $392 million.
That was sharply lower than Wall Street’s expectations for $848.7 million.
Bank of America also released $362 million from its loan loss reserves.
DiDi Global Tumbles on Revenue Drop, De-listing Plans
DiDi Global (DIDI) shares are plunging 18.7% in premarket trade after reporting a sharp decline in Q4 revenue.
The Chinese ride-share service’s revenue tumbled 12.7% year-over-year to $6.4 billion at the end of 2021.
Revenue from its core ride-hailing business in China plunged 15.1% annually.
DiDi also said it will hold a shareholder's meeting on May 23 to vote on delisting from the New York Stock Exchange.
The company is under a cybersecurity investigation in China.
Chinese Q1 GDP Stronger Than Expected
China’s economy expanded faster than expected in the first quarter.
Beijing’s National Bureau of Statistics reported today that GDP rose 4.8% year-over-year last quarter vs 4.4% growth expected.
Fixed asset investment rose 9.3% annually vs 8.5% expected.
The increase came as China’s industrial production rose 5% year-over-year in March vs 4.5% expected.
But retail sales tumbled 3.5% annually last month vs a 1.6% decline expected.
Economic growth is expected to slow in China in Q2 after a new Covid outbreak prompted new lockdowns.
Homebuilder Optimism Preview
The National Association of Homebuilders releases its optimism index for April at 10:00 a.m. ET.
That survey is expected to show confidence among builders fell by 2 points this month to 77.
Builders have struggled with severe supply and labor shortages while buyer demand remains at a record high.
In Case You Missed It
- Twitter’s (TWTR) board of directors voted unanimously Friday to adopt a limited duration shareholder rights plan. That vote came in response to Tesla (TSLA) CEO Elon Musk’s $43 billion offer to buy the company. The so-called “poison pill” will allow shareholders to buy more TWTR stock at a discounted price if any person or group purchases a 15% or greater stake without board approval. The plan will expire on April 14, 2023. Twitter shares are up 2.8% ahead of the open.