Nasdaq, S&P, Dow futures climb, yields arrest slide and gain

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Stock index futures point to a higher open Friday after the broader market came within a whisker of a bear market intraday yesterday.

The market spotlight has been stolen by Elon Musk again, though, as he says the deal for Twitter is now on hold.

Nasdaq 100 futures (COMP.IND) +1.6% lead S&P futures (SPX) +1.1% and Dow futures (INDU) +0.7%.

“At one point in the New York afternoon (Thursday), the S&P 500 had been down -1.94% at the lows, which left it just shy of a -20% decline since its all-time closing peak that would mark the formal start of a bear market,” Deutsche Bank’s Jim Reid said. “But then in the final hour there was a major recovery that meant the index only saw a modest -0.13% fall on the day, even if that still marked a fresh one-year low.”

“Futures markets are implying we’re going to see that rally extended today,” he added. “But even if we do see a recovery of that sort of magnitude, then the major losses we’ve already seen this week mean it would still be the first time in over a decade that the index has posted 6 consecutive weekly declines.”

“For the FANG+ index, the late recovery wasn’t enough to bring it back into positive territory, and there was a significant milestone reached since its latest slump means it’s now more than -40% beneath its all-time high, which surpasses its losses during the Covid selloff of 2020 when it was ‘only’ down by -34% from peak to trough.”

Also bucking the weekly trend are Treasuries. The 10-year yield is up 8 basis points to 2.8%. The 2-year is up 6 basis points to 2.58%.

And crypto is finally catching a bid, with bitcoin reclaiming the $30K level.

“The latest crypto-hyperinflation should not cause market contagion,” UBS’ Paul Donovan said. “While the media may refer to crypto bros as ‘investors’, they are in reality gamblers; we do not worry about equity contagion when someone loses money playing roulette at Monte Carlo. The same applies to cryptos.”

Still, many people referred to those creating synthetic CDOs based on mortgage tranches as gamblers as well.

After the start of trading, the University of Michigan releases its early measure of May consumer sentiment. Economists predict a small drop to 64.

“This is a fun statistic, not because it says anything about sentiment (a dubious assertion), but because it shows the gulf of political polarization. Democrats and Republicans live in the same economy, but report that they inhabit different economic planets,” Donovan said.

Among active stocks besides Twitter, Robinhood is up sharply before the bell on reports of a stake from the owner of the FTX crypto exchange.