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

World shares ease as yields and oil ring inflation alarm

EconomyMar 08, 2021 04:16AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A man wearing a protective face mask talks on his mobile phone in front of a screen showing the Nikkei index in Tokyo 2/2

By Danilo Masoni and Wayne Cole

MILAN/SYDNEY (Reuters) - World shares dipped on Monday as the U.S. Senate's passage of a $1.9 trillion stimulus bill put fresh pressure on Treasuries and tech stocks with lofty valuations, raising inflation jitters.

These concerns overshadowed the prospect that stimulus would give another boost to the world's No.1 economy, likely helping global growth rebound faster from the COVID-19 downturn.

Analysts expect a sharp acceleration in inflation, stoked in part by the latest spike in oil prices, which on Monday climbed above $70 for the first time since the pandemic began.

"Between reflation, inflation risk and equity valuations, there's plenty of reasons for the market to be jittery over the bond re-pricing," said Natixis strategist Florent Pochon.

"Equity valuations will of course remain a burning issue in particular for overly rich sectors," he also said, adding however that sell-offs should be seen as buying opportunities, given that central banks remain "structurally dovish".

The MSCI world equity index (MIWD00000PUS) fell 0.1% by 0828 GMT, as gains in European cyclical and travel stocks were offset by losses in Asia.

Chinese stocks posted their biggest decline in seven months, down 3.5%, on concerns that Chinese officials could tighten policy to rein in lofty valuations.

Nasdaq futures fell 2% in early European trade, reversing early gains, while S&P 500 futures fell 1% as investors looked past the benefits of the fiscal package.

According to JPMorgan (NYSE:JPM), every $1 trillion of fiscal stimulus adds around $4-$5 to companies' earnings per share, implying 6-7% upside for the remainder of the year.

Equity investors had taken heart on Friday from U.S. data showing nonfarm payrolls surged by 379,000 jobs last month, while the jobless rate dipped to 6.2% in a positive sign for incomes, spending and corporate earnings.

U.S. Treasury Secretary Janet Yellen tried to counter inflation concerns by noting the true unemployment rate was nearer 10% and there was still plenty of slack in the labour market.

Yet yields on U.S. 10-year Treasuries still hit a one-year high of 1.626% in the wake of the data, and stood at 1.594% on Monday.

U.S. yields increased a hefty 16 basis points for the week, while German yields actually dipped 4 basis points.

The European Central Bank meets on Thursday amid talk it will look at ways to restrain further increases in euro zone yields.

The diverging trajectory on yields boosted the dollar against the euro, which fell to a three-month low of $1.1891.

BofA analyst Athanasios Vamvakidis argued the potent mix of U.S. stimulus, faster reopening and greater consumer firepower was a clear positive for the dollar.

"Including the current proposed stimulus package and further upside from a second-half infrastructure bill, total U.S. fiscal support is six times greater than the EU recovery fund," he said. "The Fed is also supportive with U.S. money supply growing two times faster than the Eurozone."

The dollar index shot up to levels not seen since late November and was last at 92.06, well above its February trough of 89.677.

The U.S. currency also gained on the low-yielding yen, reaching a nine-month top of 108.63, and was last changing hands at 108.4.

The jump in yields has weighed on gold, which offers no fixed return, and pushed it down 0.1% at $1,698 an ounce and just above a nine-month low.

Oil prices were up the highest levels in more than a year after Yemen's Houthi forces fired drones and missiles at the heart of Saudi Arabia's oil industry on Sunday, raising concerns about production.

Prices had already been supported by a decision by OPEC and its allies not to increase supply in April. [O/R]

Brent climbed 1.1% to $70.14 a barrel, while U.S. crude rose 1% to $66.8 per barrel.

World shares ease as yields and oil ring inflation alarm
 

Related Articles

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 (32)
Viking Fire
Viking Fire Mar 08, 2021 6:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So many American websites infected with non americans. Just look below.
Mike Chen
Mike Chen Mar 08, 2021 5:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wonder if printing money can solve all problem, then every country can print and spend. Who wants to work and earn?
Daniel Lu
Daniel Lu Mar 08, 2021 5:06AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
DAX is the cheerleader for Europe market while China factory and export data help the recovery of world economy
Kelly Mayer
Kelly Mayer Mar 08, 2021 2:41AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nasdaq in correction territory - has just corrected 10%. Tech bubble getting deflated.
Notvery Goodathis
Peteymcletey Mar 08, 2021 12:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I can't believe the democrats could pass such an atrocious bill. So much useless stuff in it.Embarrassed for America
Josh Modern
JoshModern Mar 08, 2021 12:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
go Biden
Pablo Blanc
Pablo Blanc Mar 08, 2021 12:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Same ones yelling dollar crash to 80 are the one who want this country to go to ******
Pablo Blanc
Pablo Blanc Mar 07, 2021 11:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The bubble will be in crypto and its gonna happen fast
Ronald Warren
Ronald Warren Mar 07, 2021 11:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Puts are cheap on BLOK. Strike around $30.
Pablo Blanc
Pablo Blanc Mar 07, 2021 11:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Us dollar rebound will be loke never before, keep shorting your own countrys money, loose all yours
Jacob Steinschlag
Jacob Steinschlag Mar 07, 2021 11:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
yeah lets buy dollar as a hedge against inflation
Pablo Blanc
Pablo Blanc Mar 07, 2021 11:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Same old fufu shannagins, put it like this, buy the dip. The crash happened in march. Inflation rates will stay under 3%. Us econ is rebounding faster and better then ever before. Fear is all they have. Pay attention to your surroundings
Viking Fire
Viking Fire Mar 07, 2021 11:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Dollar is king, simply because its backed by the greatest country in the world.
andy matalobos
andy matalobos Mar 07, 2021 11:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Backed by the greatest cinema propaganda, stock markets manipulation, the non stop of printing fiat currency and the bayonets of the armament industry....The biggest Banana Republic in this world.
Adam Ortiz
Adam Ortiz Mar 07, 2021 11:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
andy matalobos someones jealous of the good ole USA
Fabio falec
falec Mar 07, 2021 11:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Adam Ortiz Biggest 🍌
Frederick Chotsky
Chotsky Mar 07, 2021 11:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fabio falec Don't be prejudiced against bananas
Bruno Silva
Bruno Silva Mar 07, 2021 11:01PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
lol it's funny to see them believe the dollar is stronger. At this point you either *****the Dollar or you let Bonds collapse. The FED is going to save bonds, so USD getting stronger is pure momentarily illusion.
Jacob Steinschlag
Jacob Steinschlag Mar 07, 2021 11:01PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
yeah, logic is easy: Because inflation fears, dollar is increasing and gold is collapsing as dollar is the hedge against inflation and gold will sell off on inflation...wait, WHAT?
Bhagwan Dass
Bhagwan Dass Mar 07, 2021 10:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
rafiel jet owner has gone in crush
Viking Fire
Viking Fire Mar 07, 2021 10:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bunch of hogwash. Yield went ip to 150 when it was 318 not just a short time ago and they press the panic button. Crypto will be less volotile soon
Bhagwan Dass
Bhagwan Dass Mar 07, 2021 10:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
now Bunge, Wilmar, kargil and Louise plane will crush with owner
Bhagwan Dass
Bhagwan Dass Mar 07, 2021 9:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
people businesses are failed in india , Europe
Bhagwan Dass
Bhagwan Dass Mar 07, 2021 9:49PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
bussines are slowdown .
Rob Fordham
Rob Fordham Mar 07, 2021 9:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bond rates even above 2 percent are still negativenrelative to inflation so not sure i get why 1.6 is panicing markets
Frederick Chotsky
Chotsky Mar 07, 2021 9:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
because when the 10 year yield surpasses the dividend on SPY, then the valuation models all break.
Bruno Silva
Bruno Silva Mar 07, 2021 9:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
He means valuations of major Tech companies gonna get rekt
Notvery Goodathis
Peteymcletey Mar 07, 2021 9:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
because of how fast it went up
Frederick Chotsky
Chotsky Mar 07, 2021 9:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Speed if the rise is irrelevant. It's a factor of P/E and dividend rates, versus the risk free rate.
Tarang Shah
Tarang Shah Mar 07, 2021 9:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
this upcoming crash will one of the most brutal ones seen historically! safeguard yourselves!
Bhagwan Dass
Bhagwan Dass Mar 07, 2021 9:44PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
no demand of anything in world.
Maks Mars
Maks Mars Mar 07, 2021 9:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Big crash starting
Franco Dominguez
Franco Dominguez Mar 07, 2021 9:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
am the manager who will pay this free money??? wash the dishes so
Gershom Zvi
Gershom Zvi Mar 07, 2021 9:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
US economy is addicted to Stimulus When is next dosage ? July ?
Shane Gg
Shane Gg Mar 07, 2021 9:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The economy isn't addicted to stimulus, our politicians are. The economy just wishes the politicians would get their boot heels of its' neck.
Dario Ruff
Dario Ruff Mar 07, 2021 9:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
There’s so much money in the market already 1.9 trillion wont do *****but make the bubble pop faster this week your gonna see the stimulus most likely pass but watch the market still stay under 3850
Tarang Shah
Tarang Shah Mar 07, 2021 9:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
change the headline.. Asia dips in red with crude above $71 now and US Treasury about to hit 52 week high
Bhagwan Dass
Bhagwan Dass Mar 07, 2021 9:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
God always help rich people
Bhagwan Dass
Bhagwan Dass Mar 07, 2021 9:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
start cycling and eat boiling food without oil or vegetable oil
Franco Dominguez
Franco Dominguez Mar 07, 2021 9:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
not only eating, but also drinking beer without alcohol
 
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