Stock futures turn Jittery into a Bond Yields Jump

The yield on the U.S. Treasury 10-year bond rose 1.462%, from 1.413% Tuesday. That’s still down from the 1.513% it hit last month. Yields rise when bond prices fall.

Stocks have been jittery in the past few days, with the big indices going down every day between loss and gain. Some money managers are concerned that stimulus measures will lead to an increase in inflation, and erode the value of bond yields. Concerns about inflation have also prompted a bet that the Federal Reserve could begin raising interest rates in the next two years.

Central bank chief executives have said the rise in yields shows optimism about economic prospects, and that they intend to keep monetary policy loose to support the economy in the future. Federal Reserve Gov. Lael Brainard said Tuesday that the recent upheaval in the link market is on its radar screen. She said she would be concerned if she saw “a chaotic situation or ongoing tension.”

“This higher trend is expected,” said Seema Shah, chief strategist at Chief Global Investors. “What made us ignorant is the timing as most expected to see these issues later in the year, or early next year.”

A sentiment was issued shortly earlier in the day with indications that Democrats will try to look for differences over jobless benefits and other issues as they aim to complete a $ 1.9 trillion relief package in the coming days. ahead. Mr Biden also said the U.S. would have enough Covid-19 vaccines for all American adults by the end of May, two months earlier than he had previously said.

“The rollout of the vaccine is going well compared to many expectations,” said Mrs Shah. “And at a time when it looks like the economy could recover on its own, we also expect a fiscal stimulus to lag behind, and forcing many people to renew their growth prospects in the US. ”

Optimism about the better economic prospects in particular stimulates demand for shares in companies that would benefit when the economy returns to normal, said Chris Dyer, director of global equities at Eaton Vance. That includes banking and energy stocks, which outperform the technology sector this year.

“We see a light at the end of the pandemic tunnel,” said Mr Dyer. “The progress made on vaccines has boosted the economic recovery and you have seen companies aiming for that economic recovery do well in recent months. . ”

Ms Brainard said on Tuesday that the Federal Reserve will not restore support to the economy until it is on a stronger footing, echoing comments from other officials.

“The Fed has made it clear that they are willing to be patient, but also [that] the results are rising as a sign of strong growth, so that’s a good environment for equality, “said Mrs Shah.

Ahead of the market opening, Lyft rose more than 4% after the company shared a strong cycling figures share in February on Tuesday. Competitive Uber also rose nearly 3%.

Investors are awaiting data on activity in the services sector from the Institute for Procurement Management, payable at 10 am ET. The numbers are expected to show that activity in the region expanded for the ninth consecutive month in February.

Fed’s beige book report, due at 2pm ET, offers the latest collection of industry news, offering insights on how companies are preparing to reopen the economy.

In commodity markets, Brent crude, the international benchmark for oil, rose 1.4% to $ 63.55 a barrel. Gold prices fell 1.3%.

Overseas, the Stoxx Europe 600 continental pan was relatively smooth.

Most major Asian indices obtained before the end of trading. The Shanghai China Composite Index rose nearly 2%, while in Hong Kong, the Hang Seng jumped 2.7%. Japan’s Nikkei 225 rose 0.5%, while South Korea’s Kospi rose 1.3%.

Write to Will Horner at [email protected]