European Shares, US Futures Mixed; Mnuchin Decision Reduces Fed’s Lending PowerYields Fall as Treasury Secretary Mnuchin decided to let several of the Federal Reserve’s emergency funding programs expire on December 31.
The major European stock indexes and U.S. stock market futures are trading mixed on Friday with stocks in Europe edging cautiously higher and U.S. futures trying to claw back earlier losses. Besides the coronavirus drag and vaccine optimism, investors are being asked to deal with conflicting prospects for U.S. fiscal and monetary stimulus.
In the United States, December E-mini NASDAQ-100 Index futures are trading nearly flat, and the December E-mini S&P 500 Index and December E-mini Dow futures are trading slightly lower. All three indices are rebounding from early session weakness.
European Shares Supported by Gains in Commodity, Retail Stocks
European stocks edged higher on Friday as gains in commodity and retail shares offset worries about U.S. politics and an impasse over fresh stimulus measures to support a pandemic-stricken global economy.
Stocks were on track for marginal weekly gains after signs of progress on COVID-19 vaccine pushed the index to February highs earlier this week.
Energy stocks were among the top gainers on oil prices steadied, putting them on course for a third straight weekly rise on prospects of an effective COVID-19 vaccine. Miners also jumped over 1% on stronger metal prices.
Treasury Yields Fall After Mnuchin Pulls Plug on Fed Lending Power
U.S. Treasury yields declined on Friday after U.S. Treasury Secretary Steven Mnuchin decided to let several of the Federal Reserve’s emergency funding programs expire on December 31.
The yield on the benchmark 10-year Treasury note slipped to 0.836% at 09:38 GMT ET, while the yield on the 30-year Treasury bond fell to 1.547%.
Treasury yields dropped after Mnuchin issued a letter on Thursday that said he would not extend the Fed’s programs that used Congress’ CARES Act funds. This reduces the Fed’s ability to support the financial system.
The Fed pushed back on Mnuchin’s decision, saying: “The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”
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