For the most part, stock markets around the world have been on the rebound overnight. Dow Futures are up 0.5%, while overseas, the Nikkei and Hang Seng are both up 1.5%, while the Dax and FTSE are both up 0.7%. The one glaring exception to this bounce is NASDAQ futures which are down 0.5% in premarket action.
This divergence suggests that capital rotation away from the technology and communications sectors which are more highly weighted in the NASDAQ, and into other areas continues. Financials have been attracting renewed interest in the US today after the Fed announced that following the next round of stress tests in June, it plans to allow banks who pass to resume dividend payments and share buybacks this summer. This positive news offsets last week’s announcement that the Fed is ending a special break on capital requirements for banks at the end of this month, and can be seen as another indication that special measures introduced during last year’s pandemic pandemonium are no longer needed with the economy improving and reopening.
Indications that the supply chain disruptions caused by a stranded container ship blocking the Suez Canal could drag on into next week or longer has sparked a rebound in commodities this morning with WTI crude oil rising 2.6% and copper climbing 1.6%. Meanwhile a shortage of semiconductor chips has forced some automakers to temporarily suspend production at some facilities.
