BNN Bloomberg's mid-morning market update: April 1, 2021
U.S. stocks climbed to a record high on the first day of the second quarter as increased stimulus in the world’s largest economy fueled optimism about the global recovery.
The benchmark S&P 500 Index closed above 4,000 for the first time as investors weighed President Joe Biden’s newly unveiled US$2.25 trillion spending plan ahead of Friday’s U.S. employment report, which is expected to show the quickest pace of hiring in five months. Technology shares led the gains, though value stocks also joined in on the rally. Treasuries rebounded after the worst quarter in decades. Oil climbed after the OPEC+ alliance agreed to increase production gradually over the next three months.
“The S&P 500 hitting a high point is a sign of the positive environment in this highly volatile time,” said Greg Bassuk, chief executive officer at AXS Investments LLC.
Traders are jockeying for position before the Easter weekend after data showed U.S. private employers hired the most workers in six months, while initial jobless claims unexpectedly increased. Biden’s ambitious plan to rebuild U.S. infrastructure has added to the growth outlook, even though Republican opposition to the plan raises questions about how much can actually be delivered.
Microsoft Corp. climbed for a second day as the company’s multibillion-dollar deal to build customized versions of its HoloLens goggles for the U.S. Army moved forward. Western Digital Corp. and Micron Technology Inc. rallied after a report the two companies are individually exploring a potential deal for Japan’s Kioxia Holdings Corp.
Investors remain focused on inflation risk as central banks reassert their commitment to low interest rates. Traders for now are looking past worsening virus trends, such as lockdowns in France and Canada’s Ontario province.
“Before you worry about inflation, there’s reflation and I think that’s the main theme in the market,” said Ed Campbell, portfolio manager and managing director at QMA.
Some key events to watch this week:
- U.S. employment report for March on Friday.
- Good Friday starts the Easter weekend in countries including the U.S., U.K., France, Germany, Australia and Canada.
These are some of the main moves in financial markets:
- The S&P 500 Index increased 1.2 per cent to 4,019.82 as of 4:02 p.m. New York time, the highest on record.
- The Dow Jones Industrial Average rose 0.5 per cent to 33,154.07.
- The Nasdaq Composite Index jumped 1.8 per cent to 13,480.11, the highest in more than two weeks on the largest jump in three weeks.
- The Nasdaq 100 Index surged 1.8 per cent to 13,329.52, the highest in almost six weeks on the biggest jump in three weeks.
- The Stoxx Europe 600 Index climbed 0.6 per cent to 432.22, the highest in more than 13 months.
- The Bloomberg Dollar Spot Index sank 0.3 per cent to 1,148.81, the biggest dip in more than two weeks.
- The euro jumped 0.4 per cent to US$1.1775, the largest climb in more than two weeks.
- The British pound increased 0.4 per cent to US$1.3833, the strongest in more than a week.
- The Japanese yen strengthened 0.1 per cent to 110.60 per dollar, the first advance in more than a week.
- The yield on two-year Treasuries climbed less than one basis point to 0.16 per cent, reaching the highest in more than three weeks on its fifth straight advance.
- The yield on 10-year Treasuries fell six basis points to 1.68 per cent, the largest drop in more than a week.
- The yield on 30-year Treasuries sank seven basis points to 2.34 per cent, the lowest in more than a week on the biggest tumble in more than three weeks.
- Germany’s 10-year yield sank four basis points to -0.33 per cent, the largest tumble in a month.
- Britain’s 10-year yield fell five basis points to 0.795% per cent, the first retreat in a week and the biggest drop in more than a week.
- West Texas Intermediate crude climbed 3.5 per cent to US$61.26 a barrel.
- Gold strengthened 1.2 per cent to US$1,728.72 an ounce.
--With assistance from Claire Ballentine and Vildana Hajric.