By Huw Jones
LONDON, March 2 (Reuters) - Wall Street stocks headed for a
subdued start on Tuesday as investors paused to gauge if a jump
in bond yields had run its course before dipping back into
riskier assets.
Among the standouts, Zoom Video Communications Inc ZM.O
jumped about 10% after the company said it expects millions of
people to continue using its video-conferencing platforms to
work remotely during the COVID-19 pandemic. U.S. stock futures 1YMcv1 EScv1 NQcv1 were slightly
softer.
"You have had a lurch higher in bond yields and the level is
not a problem but the speed of the move was a problem to a lot
of people. Now it's a question of are we done for a bit," said
Kit Juckes, global head of currency strategy at Societe
Generale.
A warning from China overnight about market bubbles also
dampened sentiment, leaving investors to swing risk-on, risk-off
across markets in a disjointed way, he said.
Weaker oil also weighed.
"We are all staring at our navels a little bit and the bond
market is firmly in charge. The equity market has to decide
whether it has got itself a little too frothy," Juckes said.
Investors will scrutinise speeches from U.S. Federal Reserve
officials in coming days for messaging on trends in yields,
starting with Lael Brainard at 1800 GMT on Tuesday.
U.S. stocks .N rallied on Monday, with the S&P 500 .SPX
posting its best day in nearly nine months, as bond markets
calmed after a month-long selloff.
A selloff in Treasuries last week pushed the 10-year
Treasury yield US10YT=RR to a one-year high of 1.614%. The
10-year yield was flat at 1.4462%. US/
The U.S. dollar index =USD was up 0.1% against a basket of
currencies to stand at 91.13. USD/
CHINA WARNING
Shares in mainland China and Hong Kong fell overnight after
a top regulatory official expressed concerns about the risk of
bubbles bursting in foreign markets. "Financial markets are trading at high levels in Europe, the
U.S. and other developed countries, which runs counter to the
real economy," Guo Shuqing, head of the China Banking and
Insurance Regulatory Commission, told a news conference.
Chinese blue-chips .CSI300 slipped 1.3% while Hong Kong's
Hang Seng Index .HSI lost 1.2%.
Analysts said the pause in markets was to be expected after
last week's moves in bonds.
"We are in the yield waiting room to see whether central
bankers push back this week on the ambivalence we saw last week
about interest rates," said Michael Hewson, chief market analyst
at CMC Markets.
European shares firmed with the broad STOXX 600 share index
.STOXX was up 0.6%, with Paris .FCHI , Frankfurt .GDAXI and
London .FCHI gaining by a similar amount.
German retail sales tumbled more than expected in January as
an ongoing lockdown to fight the coronavirus pandemic curtailed
retail spending.
Bitcoin BTC=BTSP fell 1.7% to $48,755 after rising nearly
7% on Monday.
A stronger greenback weighed on gold XAU= , with the yellow
metal at $1,730 an ounce, up 0.4%. GOL/
Oil prices largely shrugged off expectations that OPEC would
agree to raise oil supply at a meeting this week. Brent crude
LCOc1 recouped earlier losses and was flat at $63.74 a barrel.
U.S. West Texas Intermediate (WTI) crude CLc1 edged up 14
cents to $60.78 a barrel.
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