5 things you need to know before the fair opens on Thursday 7 April

5 things you need to know before the stock market opens on Tuesday

 

Here are the key news, trends and analysis investors need to start their stock market 

The first  thing you need to know before the stock market opens on Tuesday is  : 

1. Equity futures flat as investors await key inflation report

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, March 29, 2022.

Brendan McDermid | Reuters

Stock futures had changed little on Tuesday morning as Wall Street anticipated a major inflation report. The day before, all three major US stock indices retreated as 10-year Treasury returns hit a three-year high and worries about an economic slowdown mounted. The Dow Jones Industrial Average fell 413 points, or 1.19%, on Monday, while the S&P 500 fell 1.69%. The Nasdaq Composite – home to many growth stocks that are more sensitive to higher interest rates – fell 2.18%.

The tech-heavy Nasdaq is down about 5.7% so far. The S&P 500 is down 2.6% while the blue chip Dow is down about 1.1%.

The second thing you need  : 

2. Ten-year government bond yields hit their highest level since December 2018

The 10-year US Treasury yield traded on Tuesday morning at its highest since December 2018, reaching 2.82%, before declining slightly to 2.798%. The movement in bond yields is ahead of the March Consumer Price Index report, which the Department of Labor will release Tuesday at 8:30 a.m. ET.

Government bond yields, which are inversely proportional to prices, have risen rapidly in recent weeks. On March 7, the yield on 10-year US Treasuries was still below 1.7%. Yields, however, have risen sharply as the bond market braces for more aggressive Federal Reserve policy tightening. In March, the US central bank raised interest rates for the first time in more than three years, and an even bigger hike is expected at its meeting in May.

3. March CPI expected to show highest inflation since 1981

A person is shopping at Lincoln Market on March 10, 2022 in the Prospect Lefferts Garden neighborhood of the Brooklyn borough of New York City.

Michael M. Santiago | Getty Images

Dow Jones estimates that the consumer price index for March will show an 8.4% year-on-year increase. That would be the biggest year-on-year jump since December 1981. Economists also expect a monthly increase of 1.1%. In February, consumer prices rose 0.8% month-on-month and 7.9% over the past 12 months.

The CPI, which tracks a broad set of goods and services, has been trading for months at its highest level in decades. The Fed’s policy tightening is being done in an effort to reduce that historically high inflation rate.

Higher food and rental costs are expected to be a major contributor to March inflation numbers. In Tuesday’s report, however, energy prices will be the main focus. They are expected to see large increases following the oil price spike in early March, which was linked to the war between Russia and Ukraine.

4. US monitors claims of possible Russian chemical attack in Ukraine

Pentagon Press Secretary John Kirby speaks at a Pentagon press conference on April 11, 2022 in Arlington, Virginia.

Alex Wong | Getty Images

The US is monitoring unconfirmed reports of a possible Russian chemical weapons attack in the Ukrainian port city of Mariupol, Pentagon press secretary John Kirby said Monday evening. While Kirby indicated that the US has not verified the accounts, he said they are “deeply disturbing”. The unconfirmed reports also reflect “concerns we’ve had about Russia’s potential to use a variety of riot control means, including tear gas mixed with chemical agents, in Ukraine,” Kirby said in a statement.

British Foreign Secretary Liz Truss said the UK is working to verify details of the possible attack, which was originally a Telegram message posted by an ultra-nationalist section of Ukraine’s National Guard, the Azov regiment. The report claimed that Russian troops were using “a poisonous substance of unknown origin”.

5. Shanghai’s weeklong lockdown eases for some residents

The metropolis of Shanghai, home to many foreign companies, went into two-part lockdown this week as municipal authorities tried to contain an outbreak in China’s worst Covid wave in two years.

Hector Retamal | Afp | Getty Images

Shanghai’s Covid lockdowns eased for some residents on Tuesday, more than two weeks after strict public health protocols were put in place as the number of coronavirus infections rose. Local media reported that nearly 5 million people live in areas of Shanghai where restrictions are being eased as no new cases have been detected in that area for at least two weeks. While those residents are allowed to leave their homes, Reuters reported there was some confusion about how freely they could move.

Shanghai is the largest city in China, home to about 26 million people. Concerns about the humanitarian and economic impact of the strict lockdowns have increased in recent days. On Monday, the US State Department told all non-emergency government employees and their relatives in Shanghai to leave the city.

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