Treasury yields rose with stocks on Thursday after a report suggested President-elect Joe Biden plans Covid-19 relief of about $2 trillion.
Biden’s advisers recently told allies in Congress about the cost of the package, according to the report. Biden is expected to announce his economic support plans later in the day. Futures on the small-cap Russell 2000 Index jumped, while contracts on the tech-heavy Nasdaq underperformed.
In Europe, the Stoxx 600 Index rose, with automakers, miners and banks leading gains. Carrefour shares fell as much as 7.4% after the French government expressed opposition to Canada’s Alimentation Couche-Tard buying the company. In Asia, Alibaba Group Holding Ltd. and Tencent Holdings Ltd. climbed after the U.S. decided against banning American investment in the Chinese tech giants.
Investors are betting on an economic recovery this year are tolerating stretched stock valuations, in part on expectations of further U.S. fiscal spending and better control of the pandemic with vaccines. With Biden due to take office within days, the transfer of power promises more turbulence. Earlier, the House of Representatives voted to impeach President Donald Trump for a second time, though a Senate trial for Trump likely won’t get underway before his term ends on Jan. 20.
The latest comments from policy makers have also reinforced expectations of loose monetary policy, with Federal Reserve Governor Lael Brainard pushing back against suggestions the central bank could taper its bond-buying program this year. Fed chief Jerome Powell is due to discuss topics including the Fed’s policy framework later Thursday.
“This will be a great year for the economy and earnings, but just a good year for the stock market,” Bob Doll, chief equity strategist at Nuveen, said on Bloomberg TV. “In other words, I think multiples are held back a bit because of modestly rising interest rates and inflation.”
On the virus front, China recorded its first Covid-19 death since April as new clusters continued to expand.
Elsewhere, oil steadied, the dollar was little changed and Bitcoin rose to $38,300.
Here are some key events coming up:
- JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. are among firms due to report earnings.
- U.S. President-elect Joe Biden plans to lay out proposals for fiscal support on Thursday.
- Federal Reserve Chairman Jerome Powell takes part in a webinar on Thursday.
- U.S. initial jobless claims data are due Thursday.
- U.S. retail sales, industrial production, business inventories and consumer sentiment figures are due Friday.
These are some of the main moves in markets:
- Futures on the S&P 500 Index increased 0.2% as of 10:25 a.m. London time.
- The Stoxx Europe 600 Index advanced 0.4%.
- The MSCI Asia Pacific Index gained 0.3%.
- The MSCI Emerging Market Index climbed 0.2%.
- The Bloomberg Dollar Spot Index declined 0.1%.
- The euro was little changed at $1.2159.
- The British pound advanced 0.1% to $1.3654.
- The onshore yuan strengthened 0.1% to 6.464 per dollar.
- The Japanese yen weakened 0.1% to 104.01 per dollar.
- The yield on 10-year Treasuries advanced three basis points to 1.11%.
- The yield on two-year Treasuries gained less than one basis point to 0.15%.
- Germany’s 10-year yield fell one basis point to -0.53%.
- Britain’s 10-year yield increased less than one basis point to 0.31%.
- Japan’s 10-year yield climbed less than one basis point to 0.041%.
- West Texas Intermediate crude dipped 0.1% to $52.88 a barrel.
- Brent crude dipped 0.1% to $56 a barrel.
- Gold weakened 0.2% to $1,840.94 an ounce.