US index futures fluctuated in early morning trading on Wednesday after the Dow closed at a record high.
Futures contracts related to the industry average Dow Jones and S&P 500 were approximately flat-rate around 6 a.m. Eastern Time, while Nasdaq 100 futures traded relatively lower.
The muted trade comes after the Dow closed at a record high during regular trading on Tuesday, the eighth record average of 30 stocks this year. The index also reached its highest intraday high, driven by strength in stocks of Salesforce. The S&P 500, meanwhile, fell 0.06% during the volatile trading session, while the Nasdaq Composite fell 0.34%. Apple had the most negative impact on the Heavy Technology Index, slipping 1.6%.
“If you look at any historical norms, the estimates are stretched. But we’ve never seen a 1.3% long bond, so we’re here in unexplored waters, so higher P / Es are justified based on lower interest rates,” Scott Black said. founder and president of Delphi Management. “The other thing is that the Fed will be very flexible … it will keep interest rates low, so you’ll have the wind in your back.”
Meanwhile, the Treasury’s ten-year yield on Tuesday reached 1.30%, the level last seen in February 2020. The 30-year rate also reached its highest level of the year. Some on Wall Street believe higher rates could encourage investors to turn away from stocks and convert to bonds, while at the same time putting pressure on market areas, including technology, that has benefited from low-rate environments.
But others, including Jeff Buchbinder of LPL Financial, believe those fears could be inflated.
“Our preference for stocks over bonds – backed by low interest rates – is one of our recommendations for the highest assurance for 2021,” the capital strategist said. “Several segments of the stock market – particularly the energy sector and banks – offer higher yields than traditional high-quality bonds and offer the attractive potential to raise capital as interest rates rise,” he added.
In terms of earnings, Hilton will report quarterly results before the market opens on Wednesday, while Owens Corning, Wingstop, Analog Devices and Nabors are among the names on the list after the bell closes.
Investors will also get a sense of the current economic recovery when January sells little are released Wednesday at 8:30 p.m. Economists polled by Dow Jones expect sales to rise 1.2% during the month, after an unexpected drop of 0.7% in December.
Elsewhere in the market, bitcoin briefly crossed $ 50,000 for the first time on Tuesday, while its rise to new record highs continued.
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