S&P 500 Futures Decline as Treasury Yield Hits 3-year High Ahead of a Major Reports due this week

S&P 500 Futures Decline as Treasury Yield Hits 3-year High Ahead

Today morning, stock futures declined as the 10-year Treasury yield hit a new three-year high record and a week of critical first-quarter earnings reports started.

Futures on the Dow Jones lost 60 points, and S&P 500 futures declined by 0.3%. Nasdaq futures were also trading lower by 0.4%.

On Monday, the 10-year Treasury yield attained its peak level in the last four years and was trading around 2.87%. The treasury yield was 1.71% at the start of March and has increased as the central bank pivoted to a tightening stance.

The quarterly results reported by Bank of America showed a 13% year-over-year decline in earnings per share.

Netflix will report its quarterly earnings on Tuesday, and Tesla will declare it on Wednesday.

Investors will pay great attention to forwarding guidance, specifically for comments on how companies deal with increasing costs. Last week, March’s CPI reading showed an 8.5% growth from a year ago, the fastest yearly increase since December 1981.

22V Research’s Gerard MacDonell said in a note Sunday, “The odds seem to belong against underlying inflation moderating to an acceptable pace without a significant deceleration of demand growth.”

In a Sunday note, Raymond James’ Tavis McCourt, “Our belief remains that 2022E EPS likely comes down a bit through earnings season, but likely less than we would have thought a month ago. And the more U.S.-centric and more services-centric the company, the better the EPS outlook is likely to be.”

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