(Bloomberg) – Shares rose as traders awaited clarity from Federal Reserve Chairman Jerome Powell on how the central bank perceives the recent rise in government bond yields.
Energy stocks led gains in the S&P 500 as crude oil rose sharply following OPEC +’s decision to keep production unchanged. The Nasdaq Composite briefly obliterated its progress in 2021, while the Dow Jones Industrial Average outperformed. Bonds were reasonably stable after benchmark 10-year yields proached 1.5%. Mortgages rose above 3% for the first time in seven months – raising concerns that higher borrowing costs will track the pandemic housing rally.
Powell is expected to use his strength at a Wall Street Journal event on Thursday to reaffirm his looser-for-longer stance on monetary policy and make it clear he wants to avoid a repeat of last week’s bond market chaos. In a congressional statement last month, the Fed chief downplayed concerns that rising interest rates would hurt the economy, instead declaring at one point that they were a “declaration of confidence” in the outlook. The 10-year state rate rose briefly to 1.6% the next day.
“The Fed chairman will do his best to quell QE talks during his long-awaited speech on the US economy,” said Fawad Razaqzada, an analyst at ThinkMarkets, referring to quantitative easing. “Powell can not be too deafening either, as he will also have to tackle concerns about inflation. So he wants a hard job convincing the markets that the Fed’s policy is on the right track. Stocks may fall further if he is unable to do so. ”
Some important events to see this week:
The US employment report from February on Friday will provide an update on the speed and direction of the country’s recovery in the labor market.
These are some of the key features of the markets:
The S&P 500 rose 0.2% from 11:30 New York time. The Stoxx Europe 600 index fell 0.4%. The MSCI Asia Pacific Index fell 2%. The MSCI index for Emerging Market fell 2%.
The Bloomberg Dollar Spot Index was slightly changed. The euro fell 0.2% to $ 1,204. The Janese yen weakened 0.5% to 107.59 per. Dollar.
The yield on 10-year government bonds fell by two basis points to 1.46%. Germany’s 10-year interest rate fell four basis points to -0.33%. UK 10-year interest rates dipped seven basis points to 0.714%.
West Texas Intermediate crude rose 5.1% to $ 64.40 per barrel. Barrel. Gold rose 0.5% to $ 1,720.18 an ounce.
For more articles like this, visit us at bloomberg.com
sign up now to be at the forefront with the most trusted business news source.
© 2021 Bloomberg LP