Futures of US stock markets fell on Monday and the settlement of US government bonds was extended to its sixth week after advances towards a new fiscal stimulus bill illuminated the economic outlook. and decreased demand for technology stocks.
Futures related to the S&P 500 fell 0.6%, suggesting that the broad market may decline after the opening bell. The benchmark ended Friday at 0.8% during the week, after a volatile week in which investors abandoned major technology stocks. Nasdaq-100 futures fell 1.6% at the start of the new week, noting that technology stocks are widening losses.
In the bond market, the US performance to 10 years benchmark. Treasuries rose to 1.610% as investors withdrew funds from assets considered the safest in the world. Yields increase as bond prices fall. It had finished 1.551% on Friday, the highest since February 2020.
President Biden’s $ 1.9 trillion Covid-19 relief plan was approved in the Senate over the weekend and faces a vote in the House as early as Tuesday. Additional fiscal spending is expected to bolster the pace of economic recovery and boost inflation. As the outlook brightens, money managers are withdrawing from government bonds and technology stocks and moving on to sectors such as banking and energy that are likely to get the economy back on track.
“Stimulus checks on people’s bank accounts will be a big driver of growth, as the U.S. consumer is such an important part of U.S. growth,” said Shaniel Ramjee, pictet Asset’s multi-asset fund manager. Management. “The underlying strength of the U.S. economy, rising expectations of total stimulus overruns, and rising inflation expectations due to oil: bond yields are likely to continue to rise.”
Technology stocks have been declining in recent weeks as vaccination programs move forward and economic data point to recovery. The Nasdaq Composite Index fell more than 2% last week and lost ground for the third week in a row. This is because investors are betting that larger media, communications and online shopping companies will experience a slower growth rate as the pandemic blockades end.
Traders worked Friday on the floor of the New York Stock Exchange.
Photo:
Nicole Pereira / Associated Press
“The main element of the market is what is happening in the yield market: the U.S. technology side is suffering from the current normalization of the cost of capital,” said Samy Chaar, chief economist at Lombard Odier. “Currently, the market recognizes that we are in a recovery. Flows are rebalanced to better reflect this cyclical recovery. “
Abroad, the Stoxx Europe 600 pancontinental rose 0.6%, led by banking stocks. European stock markets benefit from investors’ investment in value stocks, analysts say.
European government bond yields also continue to rise, with a 10-year German benchmark yield rising to minus 0.284% from minus 0.295% on Friday. Investors expect a meeting of the European Central Bank later this week to get clues as to whether it will act to soften funding conditions.
In Asia, most major benchmarks fell when closing the deal. The Shanghai Composite fell 2.3% and Hong Kong’s Hang Seng index fell 1.9% as investors clashed with signs that Chinese policymakers will take more steps to curb debt and avoid the formation of asset bubbles.
Bitcoin traded around $ 50,600 on Monday, up nearly 4% from Friday evening, according to CoinDesk data.
Write to Anna Hirtenstein to [email protected]
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