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Futures Slides As Yields Surge, Archegos Jitters Persist

US index future slumped on Tuesday as traders continued to fret over fallout from the implosion of Archegos (especially after Morgan Stanley said it was not done selling residual blocks) and as Treasury yields soared to the highest since Jan 2020.

Emini S&P futures were down 13 points or -0.3% to 3,946, with ViacomCBS shares rising 2.6% premarket; Discovery Inc. and the American Depositary Receipts of Chinese companies linked to the Archegos block trades also posted gains. Tesla fell after a report Xiaomi Corp. plans to invest $15 billion to make electric cars. Industrial stocks and banks such as JPMorgan, Morgan Stanley and Boeing added between 0.9% and 1.4%. American Airlines rose 1.2% after an upgrade from Jefferies. The carrier expects to put most of its fleet back in service in the second quarter on signs of a travel rebound.

Nasdaq 100 futures slipped 0.7% as the FAAMG stocks dropped between 0.6% and 0.8% premarket, pressured by the latest reflation scare which pushed the 10Y as high as 1.77%. The Nasdaq -which is still about 7% below its all-time closing high, while bets on a speedy economic recovery driven by vaccine distributions and unprecedented stimulus has helped the S&P 500 and the Dow notch record closing highs last week – is set for its first monthly loss since November as rosy economic projections lifted demand for undervalued banks, energy, materials and industrial stocks.

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