Stock futures mixed as Treasury bond yields extend march; Wall Street braces for busy week with inflation, bonds and Fed testimony in focus; Reddit preps for $15 billion IPO; Bitcoin holds near September lows and Novak Djokovic wins an early court battle to contest this year’s Australian Open.
Here are five things you must know for Monday, January 10:
1. — Stock Futures Mixed, Bond Yields In Focus
U.S. equity futures traded mixed Monday, while benchmark 10-year Treasury note yields pierced a fresh 2-year high, as investors continue to re-set prices for stocks, bonds and currencies following last week’s hawkish Fed minutes and robust jobs data.
With inflation set to accelerate at the fastest annual pace in more than three decades later this week, fueled by pandemic stimulus, supply chain disruptions and rising commodity prices, last week’s Fed Minutes revealed a firmer commitment to tame price increases with rate hikes, three of which are likely to come this year, according to interest rate futures.
In the meantime, with headline unemployment falling to 3.9%, and oil prices moving back to the $80 mark, investors are concerned that lingering inflation, alongside a extended spike in Covid infections, will tame U.S. growth over the first few months of the year.
On Wall Street, futures contracts tied to the Dow Jones Industrial Average are indicating a modest 10 point opening bell gain, while those linked to the S&P 500 are priced for a 1 point pullback.
The tech-focused Nasdaq Composite, fresh off its worst week since February of last year, is looking to open 15 points lower as benchmark 10-year Treasury note yields rise to 1.796% in overnight trading.
2. — Wall Street Week Ahead
Inflation data, bond auctions and bank earnings will highlight a busy week on Wall Street, with investors also looking to key Congressional testimony from Federal Reserve Chairman Jerome Powell.
Powell will take questions from the Senate Banking Committee on Tuesday as part of his renomination process, with Lael Brainard — President Joe Biden’s nomination for Fed Vice Chair — set to follow on Wednesday.
Wednesday will also feature December inflation data, with economists looking for a headline CPI reading of 7.2%, as well as a $36 billion auction of new 10-year Treasury note yields.
Weekly jobless claims, are set for Thursday, with a $22 billion auction of 30-year notes scheduled for later that session.
On the earnings front, Wall Street’s biggest banks will kick off the fourth quarter earnings season Friday with updates from JPMorgan Chase (JPM) – Get JPMorgan Chase & Co. Report, Citigroup (C) – Get Citigroup Inc. Report and Wells Fargo WFC.
3. — Reddit Hires Morgan Stanley, Goldman For $15 Billion IPO
Reddit Inc. is moving closer to an IPO that could value the eponymous online message board operator at around $15 billion with the hiring of investment bank advisors at Morgan Stanley and Goldman Sachs.
Multiple media reports suggest the group, which filed plans with the U.S. Securities and Exchange Commission to take the sixteen-year-old company public last month, could top the $10 billion valuation it received from an August funding round lead by Fidelity Management if and when it lists later this year.
Reddit, which boasts more than 100,000 so-called ‘community groups’ and some 52 million daily active users, hired Drew Vollero — a former Snap Inc. SNAP CFO who helped the message app maker go public in 2017 — in March and has brought on investors such as Fidelity, Sequoia Capital and China-based Tencent Holdings.
4. — Bitcoin Holds Near September Lows As Alternative Yields Leap
Bitcoin prices held near the lowest levels since late September in overnight trading, pegging the value of the world’s largest cryptocurrency some 40% south of the all-time high it reached in mid November.
A combination of rising government bond yields, a firmer U.S. dollar and the shutdown of key bitcoin mining capacity in Kazakhstan last week have all combined to push bitcoin prices into the low $41,000 range in overnight trading, with analysts noting a lack of intra-day liquidity to protest investors from sharp declines.
Riot Blockchain (RIOT) – Get Riot Blockchain Inc Report, which fell 10.5% last week, was marked 0.2% lower in pre-market trading at $20.32 each while Marathon Parent Group, a bitcoin mining rival, was marked 1.8% higher at $29.00 each.
Bitcoin was last seen trading 0.15% higher on the session at $41,938.20 each.
5. — Novak Djokovic Wins Early Court Battle To Contest Australian Open
Tennis star Novak Djokovic won an early court victory to remain in Australia and contest the first major championship of the year Monday when a Federal Judge ordered the government to reinstate his visa.
Djokovic, who has not been vaccinated against Covid 19, was denied entry last week as he attempted to travel to Melbourne, site of the Australian Open, to defend his 2021 title.
Federal Circuit Court Judge Anthony Kelly ordered his visa reinstated, however, as well as his release from a quarantine hotel, noting the world number one wasn’t given enough time to challenge the government’s decision.
Australian Immigration Minister Alex Hawke may still cancel the 34-year old Serbian’s visa — a condition Judge Kelly allowed for in his ruling — under the country’s Immigration Act.
