Financial stock exchange market display screen board on the street
- European and US stock markets advanced Monday on hopes that vaccines and stimulus would help fuel a global economic recovery.
- The dollar firmed ahead of Wednesday’s US Federal Reserve monetary policy meeting.
- This week’s Fed meeting comes as investors fret that a strong US recovery will fan inflation and force an interest rate hike earlier than previously expected.
European and US stock markets advanced Monday on hopes that vaccines and stimulus would help fuel a global economic recovery from the coronavirus crisis, dealers said.
On Wall Street, both the Dow and S&P 500 pushed higher from record closes on Friday.
In Europe, London and Paris were firmer while Frankfurt edged up 0.1% to a level close to a record high it set last week.
Milan added 0.6% despite the re-imposition of lockdown restrictions in most of Italy to curb a new virus outbreak.
“This week looks like a busy one, so the question is whether investors will continue to gravitate toward stocks as attention turns back to interest rates and consumer demand,” said JJ Kinahan, chief market strategist at TD Ameritrade.
The dollar firmed ahead of Wednesday’s US Federal Reserve monetary policy meeting.
Brent oil topped $70 per barrel on positive industrial production and retail sales data in key crude consumer China but then fell back.
“Investors continue to anticipate speedy economic recoveries as the powerful forces of accelerating vaccine rollouts and significant financial assistance combine,” said Richard Hunter, head of markets at trading firm Interactive Investor.
Bitcoin stood around $57 000 after hitting a record $61 742 on Saturday on keen demand for the world’s most popular cryptocurrency.
Asian stock markets closed mixed as early rallies ran out of steam.
Investors have been emboldened this year as Covid vaccine rollouts and the easing of most lockdowns have stoked recovery hopes.
Bets on a strong rebound increased last week as US President Joe Biden signed off on his $1.9-trillion stimulus plan, which includes big cash handouts for struggling Americans.
This week’s Fed meeting comes as investors fret that a strong US recovery will fan inflation and force an interest rate hike earlier than previously expected.
That is reflected in the spike in government debt yields, particularly benchmark 10-year Treasury notes — a canary in the coal mine for coming price increases.
“The passage of the $1.9-trillion American rescue plan is set to release another boost to a US economy which was already showing some signs of a turnaround,” added analyst Hunter.
“The current fear is that the package could actually overheat the economy, and the meeting of the Federal Reserve later in the week will need to allay that concern.”