US stock futures are at higher levels on Monday, indicating that the Dow Jones Industrial Average and the S&P 500 will hit record highs after the record.
Dow futures are up 0.3%, indicating that blue-chip stocks will increase their gains in companies sensitive to economic recovery. Contracts with the S&P 500 rose 0.1%. Nasdaq-100 futures will point to a muted gain in the technology sector with a rise of about 0.1% tic.
U.S. The rally resumed on the back of a strong rally in the stock market a few weeks after the government’s bond market was hit hard by a sharp move. The yield on the 10-year Treasury has risen sharply to six weeks, its longest winning streak since December 2016. Some money managers are worried that inflation will rise sharply, prompting the central bank to consider raising interest rates over the next two years. .
Federal Reserve officials have repeatedly tried to allay such fears and reiterated that they would keep monetary policy loose for the foreseeable future to help the labor market recover. Investors are looking to the Federal Reserve’s forthcoming monetary policy statement on Wednesday for more guidance on the health of the economy, and the views of policymakers on bond yields and the likelihood of inflation.
“The fear factor is gone now, so the markets are looking for a balance. Bond yields will go up, but the central banks are not backing down, ”said Carsten Brzezinski, ING Group.No.
Global head of macro research. “The Fed meeting is clearly crucial and essential to what the Fed has in the markets for further education.”
Investors are pulling out of safe government bonds as economic prospects pick up. They have also started turning in the technology sector and energy stocks of manufacturers and banks in recent weeks, benefiting from the economic recovery. Optimism over the rebound has been driven by the rapid expected vaccine rollout and the passing of an additional $ 1.9 trillion in financial stimulus.
“With the economy reopening, this monetary stimulus in the form of checks will have a greater impact on consumption,” Mr Brzezinski said. This is important because consumer spending in the U.S. No. accounts for more than two-thirds of economic output. “Low-income families will spend almost entirely on this investigation,” he added.
Some money managers are concerned that a large monetary package could lead to a sharp rise in inflation, and in the long run, forcing the Fed to raise interest rates sooner than suggested by policymakers.
The yield on 10-year treasuries fell to a low of 1.627% on Monday. It ended at 1.634% on Friday, the highest since February 6, 2020.
“The Fed needs to send a message here that the economy is still watching for the significant progress it needs before it returns to pre-epidemic conditions, but equally, it won’t be as strong as some of these moves are guaranteed to be based. On fundamentals, ”said James Ashley, head of international market strategy at Goldman Sachs Asset Management. “So it’s that you calibrate that message in a way that’s neither too proud nor too clever.”
In premarket trading, shares of Caesar Entertainment rose 4.4%. The S&P Dow Jones index said late Friday night that the S Candino operator will be added to the S&P 500 from March 22.
Over the weekend, Bitcoin crossed $ 60,000 for the first time on Saturday. On Monday, it returned to trade near 56,215.86.
Overseas, non-continental stocks Europe 600 rose 0.4%.
The main equity benchmark in Asia ends on a mixed day. The Shanghai Composite Index was down about 1% and the South Korean Kospi was down 0.3%. Japan’s Nikkei rose 225% to 0.2% and Hong Kong’s Hang Seng index rose 0.3%.
The stock market rebounded last week.
Photo:
Nicole Pereira / Associated Press
Write to Caitlin Ostroff at [email protected]
Copyright Pirate 20 2020 Dow Jones & Co., Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
.
