NEW YORK, Feb 17 ― The Dow Jones Industrial Average notched a record closing high, joining a global march propelling stock indexes to record highs yesterday, as investors bet that Covid-19 vaccinations and US stimulus will deliver a durable economic recovery after a year of lockdowns.
Bitcoin added to the bullish mood, briefly climbing above US$50,000 (RM201,494) for the first time, while prospects of “reflation” ― a boost in inflation from extraordinary fiscal stimulus ― pushed US Treasury yields higher.
US President Joe Biden was travelling to Wisconsin yesterday to press his case for a US$1.9 trillion pandemic relief Bill in the political battleground state that helped secure his victory in last year's presidential election.
The MSCI's global stock index was about flat at 684.70 after hitting a record high of 687.26 earlier in the session.
On Wall Street, the Dow hit an all-time high yesterday, while the S&P 500 and the Nasdaq retreated slightly from record levels, as investors bet on more fiscal aid to lift the world's biggest economy from a coronavirus-driven slump.
“The reflation trade continues to push equity markets across all industries and multi-caps ... and this rally could continue in the near-term,” said Tony Bedikian, head of global markets at Citizens Bank in Boston.
The Nasdaq dipped as technology stocks moved lower, while concerns over rising interest rates kept the benchmark S&P 500 little changed.
The Dow Jones Industrial Average rose 64.35 points, or 0.2 per cent, to close at 31,522.75, the S&P 500 lost 2.24 points, or 0.06 per cent, to finish at 3,932.59 and the Nasdaq Composite dropped 47.98 points, or 0.34 per cent, to end at 14,047.50.
European shares ended about flat around a one-year peak yesterday as a boost from major mining and bank stocks was tempered by losses in most other sectors, with investors remaining uncertain over a euro zone economic recovery.
The pan-European STOXX 600 index finished down 0.06 per cent.
The 10-year US Treasury yield rose above 1.3 per cent for the first time in nearly a year yesterday and the yield curve steepened as expectations of extended fiscal and monetary stimulus alongside hopes of an economic upswing added momentum to the reflation trade.
“The market has fully embraced the prospects of Biden's US$1.9 trillion stimulus, and the accelerated vaccine rollout is support of further bearish price action as well,” Westpac strategists told clients.
Bond yield curves ― considered a reliable barometer of growth expectations ― have also steepened, with the gap between two-year and 10-year US notes now around 117 bps, the widest since March 2017.
The US dollar bounced off three-week lows as bullish comments from a US Federal Reserve official and upbeat manufacturing data helped arouse investor risk appetite.
Against a basket of its rivals, the greenback gained 0.245 per cent to 90.555, after earlier falling to 90.117, its lowest level since January 26.
Bitcoin briefly soared above US$50,000 to an all-time high, adding steam to a rally fuelled by signs that the world's biggest cryptocurrency is gaining acceptance among mainstream investors and companies. The cryptocurrency was last up 1.5 per cent at US$48,649.25.
Oil prices hovered near 13-month highs yesterday, supported by a deep freeze in the US South that shut wells and oil refineries in Texas.
Brent crude futures settled at US$63.35 a barrel, up 5 cents or 0.08 per cent, while US crude oil futures settled at US$60.05 a barrel, up 58 cents, or 0.98 per cent.
US natural gas futures jumped as much as 10.4 per cent yesterday to an over three-month high as bone-chilling weather across the United States disrupted pipeline flows and pushed up heating demand.
Spot gold was down 1.34 per cent at US$1,794.06 an ounce. ― Reuters
