Dow opens modestly higher even as bond yields gain

The seven-day average of COVID-19 vaccine doses administered in the U.S. recently hit 1.8 million a day, the Wall Street Journal reported, based on analysis of Centers for Disease Control and Prevention data. More than 50 million Americans have received at least one dose of a vaccine, representing about 15.3% of the population, according to the CDC. Meanwhile, the U.S. has averaged 65,468 cases a day in the past week, down 19% from two weeks ago.

However, Texas and Mississippi said that would they end mask mandates and reopen businesses, despite recommendations for caution from public-health professionals, including the CDC, which has warned against complacency.

Separately, Washington lawmakers hashed over a further round of COVID aid, with Democrats negotiating the terms of Biden’s $1.9 trillion relief package. That’s likely to add to the deluge of government bond issuance. Investor anxieties have centered on moves in the bond market over the past two weeks, with attention trained on moves in the benchmark 10-year Treasury yield.

“The pace of the rise in interest rates was a bit worrisome,” said Will Geisdorf, TK. “I think the market is still kind of digesting that.”

Right now, investors are most interested in the question of re-opening the economy, Geisdorf told MarketWatch. Any economic boost from more fiscal aid is already price into the market, he thinks,  so the real question becomes, “how quickly do things open back up and how well do we suppress further spread?”

For now, Geisdorf thinks we’re in “a pause in the reflation trade. I think rates move higher and stocks can move higher with rates. That’s why you’ve seen the back and forth over the past few weeks.”

Federal Reserve Gov. Lael Brainard on Tuesday said that she wasn’t concerned about the move in yields, which have weighed on stocks because they imply higher borrowing costs for corporations and individuals, but she did note that she was “paying close attention to market developments.”

Brainard said that the economy could see a burst in inflation but said that any such rise would be transitory and due to bottlenecks of supply against a surge in demand as the economy attempts to normalize from social-distancing protocols.

Meanwhile in U.S. economic data, ADP’s private-payroll data for February showed 117,000 jobs were created in the month, below the forecast from economists polled by Dow Jones, for 225,000 jobs and compared with a revised 195,000 in January. The ADP data come ahead of the more closely followed nonfarm-payrolls report due on Friday from the U.S. Labor Department.

IHS Market service sector purchasing manager indexes are due at 9:45 a.m. and the ISM services PMI will be released at 10:00 a.m. The Beige Book, the Fed’s report on business conditions in its districts, will be released at 2 p.m.

Meanwhile, a number of Fed speakers are set to talk Wednesday, including Philadelphia Fed President Patrick Harker at 10 a.m., Atlanta Fed President Raphael Bostic at noon and Chicago Fed President Charles Evans at 2 p.m.

Which stocks are in focus?

• Shares of Las Vegas Sands Corp. LVS, +1.62% rallied 3.0% in early tradeWednesday, after the casino operator announced agreements to sell its Las Vegas property and operations for $6.25 billion to Apollo Global Management APO and VICI Properties Inc. VICI.
• Oscar Health  OSCR,  said that it priced its initial public offering at $39, raising $1.4 billion. The company twice raised the range of its pricing. Co-Founder Joshua Kushner, the brother of Jared Kushner, the son-in-law of former President Donald Trump, will have 75% control of the company.
• FedEx Corp. FDX, -0.25%  said Wednesday it will invest $2 billion in its commitment to be carbon neutral by 2040. As part of the plan, the package delivery giant said it entire fleet of pickup and delivery (PUD) fleet will be electric vehicles by 2040. 
• Shares of fuboTV Inc. FUBO, -15.13%   jumped 8% after the bell after the live-sports streaming service reported spikes in quarterly revenue and subscribers. 
• Boston Scientific Corp. BSX, -0.40%   announced Wednesday an agreement to buy the global surgical business of Lumenis LTD for $1.07 billion in cash from Baring Private Equity Asia. Shares slipped 0.4%.
• Cannabis accessories maker Greenlane Holdings Inc.  GNLN, +5.60% said Wednesday it has acquired the specialty silicone smoking products Eyce brand and most of its assets in a deal it said would immediately boost earnings. 

How are other assets faring?

• Bond yields rose on Wednesday after the European Central Bank declined to take action to rein in bond yields. The yield on the 10-year Treasury note TMUBMUSD10Y added 6 basis points to 1.468%. Yields and bond prices move in opposite directions.
• The dollar gained 0.2%, as measured by the ICE U.S. Dollar Index DXY, +0.23%.
• Oil futures edged higher as traders await this week’s meeting of OPEC+ members, with the U.S. benchmark CL.1 up $1.13, or 1.7%, at $60.88 a barrel, as the commodity attempts to erase Tuesday’s losses. Gold futures GC00 declined 1.4%, to trade at $1,708.70 an ounce, as the precious metal resumed a downtrend.
• Equities were mixed in Europe, with the pan-European Stoxx 600 index SXXP down 0.1% and London’s FTSE 100 UKX gaining 0.3%.
• Stocks surged in Asia: The Shanghai Composite SHCOMP jumped 2% and Hong Kong’s Hang Seng Index HSI rallied by 2.7%, and China’s CSI 300 000300, +1.92% gained 1.9%, while Japan’s Nikkei 225 NIK rose 0.5%.