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ZH: Futures, Yields Slide As Month-End Jitters Spread

US equity futures faded a modest overnight rebound on Thursday, ahead of data that is expected to show a small drop in weekly jobless claims after last week’s surprise spike, while the tech-heavy Nasdaq looked set to stabilize after its latest 2% rollercoaster drop in the previous session. The dollar and 10Y yields were unchanged from Thursday’s close, while oil turned lower after a rally spurred by the blockage of the Suez Canal fizzled. It wasn’t clear what was the reason for the persistent late – and as of today, early – selloff, but increasingly many are speculating that the month-end rebalance by pensions is winning the battle, if not the war, against the quant buying we noted in “Month-End Set For Epic Clash Between Forced Pension Selling And Quant Buying.”

At 730 a.m. ET, Dow e-minis were up 27 points, or 0.09%, S&P 500 e-minis were flat, and Nasdaq 100 e-minis were up 24 points, or 0.18%.

Among some early movers, shares of Nike fell 3.6% as the company risked a boycott in China over its practice of not sourcing cotton from the contentious Xinjiang region. Carnival Corp. rose from its worst three-day slump since November on prospects for the return of cruise-line operations. U.S.-listed shares of Baidu Inc, Alibaba Group Holding Ltd and JD.Com Inc were subdued after the U.S. securities regulator adopted measures that would kick foreign companies off stock exchanges if they do not comply with U.S. auditing standards.

Nasdaq 100 futures turned red after rising earlier, after a Wednesday rout which saw investors pile into energy names and dump growth stocks, as investors are mulling which sectors of the stock market are best-placed to benefit from faster growth, while monitoring the risks of higher inflation. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell laid out their positive assessments of the recovery with reminders that it still has a long way to go in a second day of Congressional testimony.

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