Shares are under pressure earlier in the week as bond yields rise in hopes that the global economic recovery is on the verge. These hopes have been raised by the continued deployment of COVID-19 vaccines worldwide and the $ 1.9 trillion program planned by the Biden administration.
The performance of the TMUBMUSD10Y of the Treasury at 10 years of reference,
rose to 1.337%, after rising 14.5 basis points last week as investors continue to flee bonds in fear of inflation heating up. Yields move in the opposite direction to prices.
Therefore, the testimony of Federal Reserve Chairman Jerome Powell before Congress on Tuesday and Wednesday will be closely monitored.
However, in ours call of the dayFundstrat’s global advisors said there were many reasons (in fact, seven), the shares were a buy. Fundstrat founder Thomas Lee said there was an apprehension ahead of Powell’s testimony, but he advocated a “buy the dip” strategy.
“Part of that [apprehension] reflects the fact that bond yields have risen steadily and that equity investors are nervous that the bond market may reach some sort of “breaking point” during [Powell’s] witness, “Lee said, noting that it was possible that the actions could act” nervously “within and during the testimony.
“The biggest arc of history, in our view, is that stocks have multiple positive supports and this constructive context is likely to prevent greater risk aversion,” he added.
The first key reason is that Washington is moving forward with President Joe Biden’s fiscal relief package and that it has been strongly supported by Treasury Secretary Janet Yellen. Second, the Fed has been vocal in its political stance, Lee said, and was willing to be patient. The reopening of the US economy is another reason to be positive around equities, with a strong economic boost. JPMorgan JPM,
said in a note Friday that the U.S.’s “V-shaped” recovery would outpace that of China, which Lee simply described using the word “wow.”
There is a perception gap between policymakers and incoming data around COVID-19, with daily cases expected to drop from 50,000 this week, and once closed this gap will be more positive for actions, the note adds. .
Noting that millennials are constantly allocating assets to stocks provides more optimism, as evidenced by the recent increase in retail brokerage account openings. “Bonds are also becoming less attractive total return vehicles, as inflationary expectations rise and the stock’s attractiveness increases,” he said. Finally, the VIX VIX volatility index,
it is steadily declining, which has historically led to large equity gains, especially for cyclists, Fundstrat said.
The markets
US stock futures ES00,
NQ00,
pointed rather lower on Monday, with Dow YM00 futures,
0.5% less, implying a 170-point loss for the Dow Jones Industrial Average DJIA,
in the open. European stocks also fell early in trading as investors pulled away from bonds and ripped commodities amid hopes of a strong economic recovery. Incentives for vaccine deployment led to Asian markets mostly overnight.
The buzz
Tesla TSLA,
you may have already made $ 1 billion in profits from your BTCUSD bitcoin investment,
according to estimates by leading technology analyst Dan Ives. The electric car company said in a Feb. 8 filing that it bought $ 1.5 billion in bitcoins.
Federal aviation regulators ask United Airlines UAL,
intensify inspections of all Boeing 777 BA,
with the type of engine that suffered a catastrophic crash over Denver, Colorado, on Saturday.
The United States approached the “devastating” milestone of 500,000 deaths by COVID-19 on Sunday. The death toll stood at 498,879 on Sunday afternoon, according to data from Johns Hopkins University.
The COVID-19 vaccine from the pharmaceutical company Pfizer PFE,
and its partner BioNTech BNTX,
it is effective up to 85% after the first dose, according to a study that uses data from the launch of Israeli vaccines.
According to a report by Janus Henderson Investors, dividends paid by US companies last year hit a record high of 2.6% to $ 503.1 billion, despite the devastation caused by the COVID- pandemic. 19.
The Prime Minister of the United Kingdom, Boris Johnson, will announce the roadmap for England 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.
Random readings
Netflix NFLX,
and Anna Delvey: The Race to Project the Story of the “False Heiress”
The conservators of the cathedral find hidden paintings
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