Investors have focused on the speed of the global economic recovery and inflation as governments increase spending to spur growth. Later this week, the US President will unveil a new stimulus program with a focus on infrastructure.
The acceleration of vaccination rates is effective in preventing coronavirus infection, which is positive news for the stock market, according to the latest US government research. Asian, European, and American indices continue to rise. The Japanese indices are an exception, as the hedge fund Archegos liquidated its assets, which affected the Japanese banking sector. Nomura Holdings Inc. announced that it’s too early to assess the impact of losses, and economists point to the resilience of the stock market in broad terms, despite the fall of a large fund.
The 10-year Treasuries yield rose to 1.74% and the 5-year bonds yield hit annual records. The ongoing rally is based on positive expectations from the labor market. Economists are expecting a new record on job creation in the US at the level of 643,000.
Despite the continuing rise in government bonds yield, many central banks continue to believe that ultra-soft policies will be needed for quite some time. The European Central Bank said that cautiousness should be prioritized when discussing the rejection of emergency stimulus, even if the economy recovers from the pandemic.
The Asian regions are also recovering. Japanese retail sales indices beat economists’ forecasts and the economic growth of Australia returned to its pre-pandemic levels.
Main market quotes:
- S&P 500 (F) 3,962.75 +3.75 (+0.09%)
- Dow Jones 33,171.37 +98.49 (+0.30%)
- DAX 14,917.30 +99.58 (+0.67%)
- FTSE 100 6,783.65 +47.48 (+0.70%)
- USD Index 93.052 +0.096 (+0.10%)