Stocks are under pressure earlier in the week, with bond yields rising in the hope that a global economic recovery is near. Those hopes were boosted by continued releases of the COVID-19 vaccine worldwide and the $ 1.9 trillion Biden administration’s planned relief program.
The 10-year Treasury yield of reference TMUBMUSD10Y,
rose to 1.377%, after rising 14.5 basis points last week, as investors continued to shy away from securities amid fears of inflation. Yields move in the opposite direction to prices.
The testimony of Federal Reserve President Jerome Powell, before Congress on Tuesday and Wednesday, will therefore be closely monitored.
However, in our call of the dayFundstrat Global Advisors said there were many reasons – seven in fact – the shares were a buyout. Fundstrat founder Thomas Lee said there was apprehension before Powell’s testimony, but he advocated a “buy the dive” strategy.
“Part of that [apprehension] reflects the fact that bond yields have been rising steadily and investors are nervous that the bond market may reach some kind of “breaking point” during [Powell’s] testimony, ”said Lee, noting that it was possible that the actions could act“ nervously ”during and during the testimony.
“The great arc of history, in our opinion, is that the shares have multiple positive supports and this constructive scenario probably prevents a greater risk overflow”, he added.
The first important reason is that Washington is moving ahead with President Joe Biden’s tax relief package and that it was strongly supported by Treasury Secretary Janet Yellen. Second, the Fed has been vocal in its political stance, Lee said, and is willing to be patient. The reopening of the United States economy is another reason to be positive about stocks, with strong economic dynamics. JPMorgan JPM,
said in a note on Friday that the US “V-shaped” recovery would outpace that of China, which Lee simply described using the word “wow”.
There is a perception gap between policymakers and the data received around COVID-19 – with daily cases scheduled to drop below 50,000 this week – and once that gap is closed, it will be more positive for actions, he added. the note.
The millennium generation by constantly allocating assets to stocks offers more optimism, he noted, as evidenced by the increase in the opening of retail brokerage accounts recently. “Bonds are also becoming less attractive vehicles of total return as inflationary expectations are increasing, increasing the attractiveness of stocks,” he said. Finally, the VIX VIX volatility index,
is in constant decline, which has historically led to large equity gains, especially for cyclicals, Fundstrat said.
The markets
US stock futures ES00,
NQ00,
pointed down on Monday morning with the Dow YM00 futures,
0.5% below, implying a loss of 170 points for the Dow Jones Industrial Average DJIA,
outdoors. European equities also fell at the start of trading, with investors abandoning bonds and buying commodities amid hopes of a strong economic recovery. The incentive to launch vaccines drove Asian markets up overnight.
The buzz
Tesla TSLA,
may have already made $ 1 billion in profit from its investment in bitcoin BTCUSD,
according to estimates by prominent technology analyst Dan Ives. The electric car company said in a February 8 filing that it bought $ 1.5 billion in bitcoin.
Federal aviation regulators are requesting United Airlines UAL,
to intensify inspections on all Boeing 777s BA,
with the type of engine that suffered a catastrophic failure in Denver, Colorado, on Saturday.
The United States approached the “devastating” milestone of 500,000 COVID-19 deaths on Sunday. The death toll stood at 498,879 on Sunday night, according to data from Johns Hopkins University.
The COVID-19 vaccine from the pharmaceutical company Pfizer PFE,
and its partner BioNTech BNTX,
it is up to 85% effective after the first dose, a study concluded using data from vaccine launches in Israel.
Dividends paid by American companies last year reached a record high – rising 2.6% to $ 503.1 billion – despite the damage caused by the pandemic COVID-19, according to a report by Janus Henderson Investors.
UK Prime Minister Boris Johnson is due to announce England’s roadmap for the end of the blockade on Monday. More than 17.5 million people – a third of adults – have received at least one vaccine and the government expects to vaccinate all adults by the end of July.
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