Global Bond Sell-off Eases, Crypto Slumps, Stocks in Focus

Global Bond Sell-off Eases, Crypto Slumps, Stocks in Focus

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Key Takeaways

• US 10-year Treasury yield falls back below 1.5%
• House votes on the stimulus bill today

Global bonds attempted to come down on Friday during the Asian session, following a day of sharp rises in Treasuries as well as losses in US equities. Benchmark Treasury yields yesterday climbed as high as 1.6% but are back below the 1.5% mark early Friday. Asian trading today performed rather weak and stocks slumped while European markets are relatively subdued and US futures point lower ahead of the opening.

Investors expect the global economy to recover swiftly and sharper than anticipated, which invokes fears of inflation that could trigger a pullback in monetary policy support. US Federal Reserve Chairman Jerome Powell said earlier in the week that inflation was under control and the Fed could tolerate inflation above the standard 2% target. Furthermore, he mitigated investors’ fears by saying that the Fed does not intend to tighten its policy prematurely, but instead the central bank will continue to be supportive and to keep its asset purchase program active.

Over to Washington, President Biden expects the House to vote on his stimulus bill today to pass without hurdles and then proceed to the Senate. Since Democrats and Republicans are split 50-50 in the Senate, Mr. Biden intends to use the budget reconciliation process that will allow him to pass the bill without Republican support. Democrats expect the bill to be approved by the week of March 8 so that the individual checks could be distributed to the people before the expiry of the unemployment insurance benefits on March 14.

Will GameStop Go Higher?

Elsewhere, the cryptocurrency market is trading to the downside on Friday. Bitcoin is gravitating towards the $45,000 mark, while Ethereum slipped below $1,500. The total cryptocurrency market cap dropped below $1.5tn as the crypto space is struggling to remain optimistic. Starting Monday, the price of bitcoin has skittered down over 20%, going from a high of nearly $58,000 to $45,000. On Sunday, the largest crypto coin reached an all-time high, breaking above $58,000 per bitcoin. This week, the slump resulted in the worst weekly performance for bitcoin since March. Ethereum is also down as much as 22% so far this week as crypto investors join the risk sell-off inequities.

Gold is keeping rather steady this week, down about 1% to the current market price of $1,760. The US dollar is advancing on Friday, while the Australian dollar and the Great British pound are easing off of their weekly highs.

The stocks most closely followed by the market today include the biggest tech stocks that tumbled during yesterday’s sell-off, namely Apple, Netflix, Alphabet, and Tesla. The EV maker slipped 8%, while the other three dropped by 2% apiece. In addition, GameStop stock today will be on the radar as some options bet that company shares will reach $800. GameStop is up 150% since Wednesday as the trading frenzy is back. The wild speculation in GameStop shares continues to be driven by retail trading enthusiasts congregating on the social media site Reddit. Futures of the video-game shop point to the upside by about 18% in pre-market trading on Friday.