Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Breaking News

Dow Closes at Record High as Cyclicals Rally Ahead of April Jobs Report

European shares jump and bond markets recover; February PMIs in focus

EconomyMar 01, 2021 04:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. A passersby wearing a protective face mask is reflected on screen displaying the Japanese yen exchange rate against the U.S. dollar and stock prices at a brokerage, amid the coronavirus disease (COVID-19) outbreak, in Tokyo 2/2

LONDON (Reuters) - European shares jumped on Monday and the bond market calmed, with yields dropping from their recent spikes, while optimism about U.S. fiscal stimulus sent oil prices higher.

After Asian stocks rallied overnight, European share indexes opened higher, with the STOXX 600 up 1.7% at 0837 GMT. London's FTSE 100 up 1.8% and Germany's DAX was up 1.3%.

The MSCI world equity index, which tracks shares in 49 countries, was up 0.5%, recovering from the previous session's multi-week low.

The much-anticipated $1.9 trillion COVID-19 relief bill was passed in the U.S. House of Representatives on Saturday, and now moves to the Senate.

In the bond market, key yields fell from their recent highs.

The U.S. 10-year treasury yield was down around 4 basis points at 1.4118% at 0837 GMT, having dropped from Thursday's one-year high of 1.614%.

Germany's benchmark 10-year Bund yield was down around 5 basis points, also below last week's spike.

(Graphic: Germany 10-year, https://fingfx.thomsonreuters.com/gfx/mkt/jbyprddzype/Germany%2010-year.png)

Market participants have become wary in recent weeks that, when economies re-open from their coronavirus lockdowns a combination of massive government stimulus and pent-up consumer demand will cause inflation to accelerate.

"There is little doubt in my mind that central banks will eventually lean quite hard against a sustained rise in yields," wrote Deutsche Bank (DE:DBKGn) strategist Jim Reid in a note to clients.

"They simply can’t afford to see it happen with debt so high."

Factory activity data for February is also in focus this week, with European PMIs due throughout the morning.

Manufacturing in Japan grew at its fastest pace in more than two years in February, as strong orders led to the first output rise since the start of the pandemic.

SLOWER PACE

But China's factory activity grew at a slower pace than in the previous month, missing market expectations, after COVID-19 related disruptions earlier in the year.

Helping sentiment was news that deliveries of the newly approved Johnson & Johnson (NYSE:JNJ) COVID-19 vaccine should start on Tuesday.

"The outlook for equity markets remains positive for most of 2021," wrote Berenberg economists Kallum Pickering and Holger Schmieding in a note.

"Although yields will likely rise further to at least 2.0% for the US 10 year Treasury and 0.0% for German 10 year Bunds by the end of 2021, the increase in yields will lag behind the improvement in the outlook for nominal GDP growth and corporate earnings," they said.

"We expect clear forward guidance by the Fed that it will not taper its asset purchases until the labour market has healed and a faster pace of ECB asset purchases if necessary."

Oil prices jumped, with Brent crude futures up 1.8% and U.S. West Texas Intermediate (WTI) crude futures up 1.7%.

Front-month prices for both contracts touched 13-month highs last week.

The dollar rose, gaining 0.3% against a basket of currencies by 0839 GMT. The Australian dollar - which is seen as a liquid proxy for risk appetite - recovered.

Wall Street also looked set for a higher open, with S&P 500 futures up 1.2%. Nasdaq futures were up 1.7% at 0841 GMT, suggesting a recovery for tech stocks.

"The (tech) sector has come under pressure from rising yields, which tends to disadvantage growth sectors," wrote Mark Haefele, UBS global wealth management's chief investment officer, in a note to clients.

"Against this backdrop, we continue to favor cyclical parts of the market, including small and mid-cap stocks, along with emerging market assets," he said.

"But we do not expect the tech sell-off to extend much further and continue to see value in the sector for longer-term investors."

European shares jump and bond markets recover; February PMIs in focus
 

Related Articles

Monster Beverage Earnings Miss, Revenue Beats In Q1
Monster Beverage Earnings Miss, Revenue Beats In Q1 By Investing.com - May 06, 2021

Investing.com - Monster Beverage (NASDAQ:MNST) reported on Thursday first quarter earnings that missed analysts' forecasts and revenue that topped expectations. Monster...

Beyond Meat quarterly revenue misses estimates
Beyond Meat quarterly revenue misses estimates By Reuters - May 06, 2021

(Reuters) - Beyond Meat (NASDAQ:BYND) Inc fell short of Wall Street estimates for first-quarter revenue on Thursday, hurt by lower sales at restaurants that sell its faux-meat...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (8)
Stephen Be
Stephen Be Mar 01, 2021 7:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
If PARANOIA and SPECULATION dictate the markets there CAN BE NO SECURITY for anyone's future. The only solution is 100% corporate taxation to pay for all human needs because every purchase reimburses them 100% at the register. Help me END THE INCOME TAXFOR ALL by taxing EVERY CORPORATE TRANSACTION at theSAME FLAT RATE of 13.5%. Thesavings from closing the IRS alone reduces the Federal Budget by 2%. PLUS the corporate accounting an legal cost reductions!
Dave Jones
Dave Jones Mar 01, 2021 6:01AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
bomd doesn't look like it's recovering much! its doa!
Wellander Wellander
Wellander Wellander Mar 01, 2021 12:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
will bond continue to drop further?
Stephen Be
Stephen Be Mar 01, 2021 12:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bonds are worthless and have been since Greenspan.
Leo San
Leo San Mar 01, 2021 12:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
After down over -1000s points tne past weeke. Off course we will rally! Xpev, nio and aapl will run! It hit Oversold !!!
Stephen Be
Stephen Be Mar 01, 2021 12:04AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
CORRECT! It's not a rally when you score 3 runs after giving up 8in the top of the inning.
Silver Bull
Silver Bull Feb 28, 2021 10:50PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fed stopped reporting M2 numbers
Stephen Be
Stephen Be Feb 28, 2021 10:50PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The last administration fabricate numbers!!!!!!!  Remember LIBOR? Worthlessafter Jamie Dimon corrupted it and was never charged for a bigger fraud than Maddow.
Notvery Goodathis
Peteymcletey Feb 28, 2021 9:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Cases miraculously dropped when they changed the criteria. So many faint positives gone
Silver Bull
Silver Bull Feb 28, 2021 9:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the whole system is rigged from top to bottom
Connecticut Yankee
A_Jaundiced_Eye Feb 28, 2021 7:49PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"...investors are counting on better news from a raft of U.S. data due this week..." Sooooo, they're buying before the news actually comes in [as good news] ?  Always a safe plan, right ?
Art Fire
Art Fire Feb 28, 2021 7:49PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nonsense.  There is nowhere for investors to go. With QE and interest rates low as ever and not changing for years (per fed) the stock market is the guaranteed place to be. Where they going to go? Bonds? Don't make me laugh, imagine buying a gov bond after the hit they just took in taxes from pandemic? Crypto? Too speculative right.  It's stock market all the way.
Ray Ong
Ray Ong Feb 28, 2021 7:43PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
conman in the market
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email