Stock Futures Tick Up Ahead of Biden's Stimulus Speech

01/14/2021 | 05:37am

By Anna Hirtenstein

U.S. stock futures rose slightly Thursday as investors awaited details of the incoming Biden administration's plans for a fresh coronavirus relief package.

Securities tied to the S&P 500 climbed 0.2%, potentially extending Wednesday's advance, which lifted the broad-market index to its second-highest level in history. Futures linked to the Dow Jones Industrial Average added 0.3%.

All eyes are on a speech expected Thursday from President-elect Joe Biden that is set to detail the scale of his proposed spending package to support households and businesses through the pandemic.

Additional stimulus would be favorable for equity markets and reinforce expectations for economic growth, said Luc Filip, head of private banking investments at SYZ Private Banking.

"How it will be implemented down to the real economy, down to small companies, that will be key," he said.

Stock markets have been largely muted this week, despite the political turmoil engulfing Washington. President Trump was impeached Wednesday for inciting the Jan. 6 riot at the Capitol, becoming the only president to have been impeached twice. With Mr. Trump leaving office in less than a week, markets largely viewed the move as symbolic rather than practical.

Thursday brings earnings from Delta Air Lines and asset-management giant BlackRock, which are scheduled before markets open. They will be scrutinized by investors for the impact of the pandemic on Wall Street and the hard-hit travel industry.

Overseas, the pan-continental Stoxx Europe 600 rose 0.3%. Italian 10-year government bond yields rose moderately, ticking up to 0.620% Wednesday from 0.587% after former Premier Matteo Renzi announced that his party was leaving the ruling coalition. This move could trigger an election, as it removes the prime minister's majority in Italy's parliament.

Italy is often seen as the weakest link among major economies in the eurozone, and political drama has previously sparked sharp selloffs in the country's government debt.

"In short this is political noise, but still something that creates uncertainties," said Mr. Filip.

Among major European shares, Fiat Chrysler led decliners, falling 8%. French supermarket chain Carrefour declined more than 6% after France's finance minister said his government may block Canadian Alimentation Couche-Tard's nearly $20 billion bid for the supermarket chain.

In Asia, the Shanghai Composite Index slipped 0.9% after data showed that China's export growth in December declined from November. Most other major benchmarks rose, with Hong Kong's Hang Seng Index adding 0.8% and Japan's Nikkei 225 up 0.9%.

China's biggest tech companies rose after The Wall Street Journal reported that the U.S. is expected to let Americans continue to invest in them, after weighing a ban. Alibaba Group gained 5% and Tencent Holdings climbed 5.3%.

Federal Reserve Chairman Jerome Powell is also scheduled to speak on Thursday at 12:30 p.m. ET at a virtual event hosted by Princeton University's Bendheim Center for Finance.

Esty Dwek, head of global market strategy at Natixis Investment Managers, said she would be watching closely for any mention of what the central bank might do about the recent rise in Treasury bond yields.

The yield on the benchmark 10-year Treasury note rose to 1.101% from 1.089% Wednesday. It has traded above 1% since the first week of January, after spending most of 2020 below the threshold.

Jobless claims for the week that ends on Jan. 9, a proxy for layoffs, will be released at 8:30 a.m. These are expected to remain elevated, as a surge in Covid-19 cases led to the imposition of more restrictions on businesses.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

(END) Dow Jones Newswires

01-14-21 0536ET

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