Shares are under pressure earlier this week as bond yields rise in the hope that a global economic recovery will approach. These hopes have been raised by the ongoing COVID-19 vaccine launches around the world and the $ 1.9 trillion Biden administration’s planned aid program.
Yield on the 10-year Treasury benchmark TMUBMUSD10Y,
rose to 1.377% after rising 14.5 basis points last week as investors continue to run out of bonds amid fears that inflation will heat up. Yields are moving in the opposite direction to prices.
Therefore, the testimony of Federal Reserve Chairman Jerome Powell before Congress on Tuesday and Wednesday will therefore be closely watched.
However, in call of the day, Fundstrat Global Advisors said there are a lot of reasons – actually seven – the shares were bought. Fundstrat founder Thomas Lee said there was an arrest before Powell’s testimony, but supported a “buy it” strategy.
“It simply came to our notice then [apprehension] reflects the fact that bond yields have risen steadily and stock investors are nervous that the bond market could reach a kind of “breaking point” during [Powell’s] testimony, ”Lee said, noting that it is possible that the actions may act“ nervously ”in and during the testimony.
“The bigger story arc, in our opinion, is that the shares have more positive supports and this constructive background probably prevents a higher risk of leakage,” he added.
The first key reason is that Washington is moving forward with President Joe Biden’s fiscal aid package and that it has been strongly supported by Treasury Secretary Janet Yellen. Second, the Fed has expressed its political stance, Lee said, and wanted to be patient. The reopening of the US economy is another reason to be positive around stocks, the economic momentum being strong. JPMorgan JPM,
said in a note on Friday that the US’s “V-shaped” recovery will surpass China’s performance, which Lee described simply using the word “wow”.
There is a difference in perception between policy makers and data received around COVID-19 – daily cases are set to fall below 50,000 this week – and once this gap closes, it will be more positive for action, the note added.
The constant allocation of Millennials’ assets to equities offers more optimism, he noted, as evidenced by the recent rise in the opening of retail brokerage accounts. “Bonds are also becoming less attractive vehicles with total returns, as inflation expectations rise, increasing the attractiveness of stocks,” he said. Finally, the VIX VIX volatility index,
it is steadily declining, leading historically to large capital gains, especially for cyclicals, Fundstrat said.
markets
US ES00 futures,
NQ00,
showed earlier Monday with the Dow futures YM00,
0.5% down, which means a loss of 170 points for DJIA Dow Jones Industrial Average,
at the opening. European equities also declined in early trading as investors moved away from bonds and acquired commodities in hopes of a strong economic recovery. Encouraging vaccine launches has driven most Asian markets overnight.
Buzz
Tesla TSLA,
he may have already made $ 1 billion in profit from his investment in bitcoin BTCUSD,
according to estimates from prominent technology analyst Dan Ives. The electric car company said in a file on February 8 that it had bought $ 1.5 billion bitcoin.
Federal aviation regulators command United Airlines UAL,
to intensify inspections of all Boeing 777 BAs,
with the type of engine that suffered a catastrophic failure Saturday over Denver, Colorado.
The United States approached the “devastating” milestone of 500,000 deaths on Sunday through COVID-19. The death toll was 498,879 late Sunday, according to data from Johns Hopkins University.
COVID-19 vaccine from Pfizer PFE
and its partner BioNTech BNTX,
is up to 85% effective after the first dose, found a study using data from the vaccine launch in Israel.
Dividends paid by US corporations last year reached a record high – up 2.6% to $ 503.1 billion – despite the ravages of the COVID-19 pandemic, according to a report by Janus Henderson Investors.
British Prime Minister Boris Johnson is set to announce England’s directions outside the blockade later Monday. More than 17.5 million people – a third of adults – have had at least one vaccine, and the government hopes to vaccinate all adults by the end of July.
Random readings
Netflix NFLX,
and Anna Delvey: The Race to Screen the “False Heiress” Story
The conservators of the cathedral find hidden paintings
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