The United States Senate passed $1.9 trillion stimulus bill, sending bond yields and therefore the USD sharply higher. Stocks have lost their shine and therefore the high growth tech sector looks set to underperform.

Senate passes US stimulus bill, yields jump


Over the weekend the United States Senate approved the Biden administration’s $1.9 trillion covid stimulus package with only minor amendments. this is often the most important stimulus package in US history.


The news comes following Friday non farm payroll report which showed that 379k jobs were added within the US in February, double what analysts were expecting. the info suggests that the labour market bottomed in December and is now on the road to recovery.


The upbeat jobs report, massive stimulus package and acceleration of the vaccine rollout programme have boosted hopes of a robust economic recovery within the US this year. Inflation expectations have also risen.


The US 10 year bond yield ticked higher to 1.60% just shy of Friday’s 1.62% A level not seen since before the pandemic. The moved boosted the US Dollar whilst taking the shine off stocks, particularly high growth tech stocks.




Tech wreck continues


The tech sector which is filled with stocks with sky high valuations is especially under the kosh on the rear of surging yields. this is often reflected within the Nasdaq which has fallen over 8% across the past three weeks.


Nasdaq futures are pointing to a different weaker start for the index.


The tech unload isn’t confined to the US, tech heavy Asia came struggling overnight. However, European shares which are more tilted towards value are outperforming global peers.




Stocks are pointing lower


US stocks are pointing to a weaker start, paring gains from Friday as bond yield concerns return to haunt the market.


Microsoft – trades -1.2% pre-market after 20000 US organisations might be compromised following a hack of the Outlook email programme.


Amazon – 1.4% pre-market on the rear of the tech selloff and after Deliveroo recorded a loss of $300 million last year. Deliveroo also announced plans to IPO in London. Deliveroo will target a valuation of $10 billion after the highest line grew 54% across the year of the pandemic.


Where next for Amazon share price?


Amazon has slipped below the key psychological 3000 level pre-market. It trades below its 50 & 100 sma on a bearish chart with the RSI supportive of further declines. 2875 offers strong support having capped losses in July and September. The bulls would wish a move above 3200 50 & 1000 sma to realize traction.US Dollar Index is charging higher as US bond yields resume their rise. US Dollar index trades +0.25% at 92.25.


EUR/USD tumbled below 1.19 to a 4-month low. Data hasn’t been that helpful with German Industrial Production Jan -2.5% MoM, down from 1.9% in December and well in need of 0.2% rise expected. However, Eurozone Investor Sentiment numbers for March were more encouraging jumping to five after declining -0.2% in February. Optimism surrounding the vaccine rollout and reopening of economies within the bloc has boosted morale.Oil eases back from over $70


Oil prices are easing back after gapping sharply higher on the open. Brent surged through $70 for the primary time since the pandemic started before giving back a number of those gains. Meanwhile WTI petroleum hit its highest level in over 2 years at just shy of $68, before slipping back.


Oil prices surged after Houthi rebels launched an attack on oil facilities in Saudi Arabia . As reports emerged that there was no damage to the facilities oil markers were reassured because the price came faraway from the highs.


The prospect of a stronger US economic recovery on the rear of a stimulus package is additionally helping to stay oil elevated. additionally to last week’s news that OPEC won’t increase production until a minimum of April.


Analysts Fiona Cincotta looks at the worth movement in WTI and levels to observe here.


US crude trades +0.3% at $66.30


Brent trades +0.25% at $69.53