Things to Know Before the Stock Market Opens

After two days of advances on Wall Street, U.S. stock futures fell on Tuesday. The Nasdaq rose about 2% to begin the week, fueled by Twitter’s 27 percent gain on Elon Musk’s new ownership in the social media platform, which ignited a rally in tech companies. In Tuesday’s premarket, Twitter gained another 5% on news that Musk will join the company’s board of directors. The stock market is amid a cyclical upswing, with April traditionally being one of the most significant months for stocks. According to MKM Partners research, the S&P 500 has averaged a 2.4 percent gain in April during the last 20 years. The index has gained on April 16 of the previous 17 years.

Treasury rates climbed on Tuesday morning, while the 2-year/10-year and 5-year/30-year yield spreads remained inverted. It’s a bond market occurrence that frequently precedes economic downturns. Traders were dumping bonds at the short end of the yield curve, fearful that the Federal Reserve might tighten interest rates even more aggressively. Bond prices follow yields in the opposite direction.

Due to supply concerns, oil prices in the United States rose further on Tuesday. The United States and its European allies considered new penalties against Russia in response to charges of war crimes committed by Russian forces in Ukraine. After a four-percent gain on Monday, West Texas Intermediate crude rose to just than $104 a barrel, breaking a two-session slump.

Shanghai Extends Lockdown

According to the director of Shanghai’s working committee on epidemic control, the coronavirus outbreak in China’s largest city remains “very dismal.” The eastern half of Shanghai, which was supposed to reopen last Friday, remained closed, as did the western half.

According to data from the Centers for Disease Control and Prevention, the highly contagious omicron BA.2 subvariant now accounts for 72 percent of Covid infections that have undergone genetic sequencing in the United States. Last week, BA.2 took over in the United States.

Senate Republicans and Democrats secured an agreement on $10 billion in additional Covid financing on Monday to purchase medicines and vaccines and maintain the nation’s testing capacity if another Covid outbreak occurs in the United States.

Amazon announced a substantial commercial rocket agreement on Tuesday; it agreed to launch up to 83 of its Project Kuiper internet satellites with three businesses. Blue Origin, founded by Amazon founder Jeff Bezos, is one of the companies involved. Amazon’s Project Kuiper is a plan to launch a network of 3,236 satellites into low-Earth orbit to provide high-speed internet to everybody, anywhere. The FCC approved Amazon’s system in 2020. The corporation has stated that it will “spend more than $10 billion” on its construction.

IPO Deals

According to data from consultancy EY, the number of public offerings in Greater China declined dramatically in the first quarter of this year. However, the market still outperformed other worldwide markets.

The initial public offerings in Greater China fell by 28% overall. However, IPO activity in Hong Kong was slower than in mainland China.

Compared to a year ago, Hong Kong saw only 12 IPO agreements, a decline of approximately 60%.

China’s technology stocks have plunged in value over the last year; this was due to the country’s regulatory crackdown and growing tensions with the United States. In comparison to a year ago, the Hang Seng Tech index is down roughly 44 percent; the benchmark Hang Seng index is down about 22 percent. The number of IPOs decreased; moreover,  the total amount raised from Greater China listings increased by 2%, or $30.1 billion, compared to a year before.

The drop in IPO activity in China and Hong Kong followed a similar pattern in the rest of Asia-Pacific, where IPOs declined by 16 percent year on year. In Asia-Pacific, IPO proceeds increased by 18%.