Shopify fuelling TSX gains, small cap stocks outperform large caps: McCreath
U.S. stock futures added to gains and Treasuries turned higher after a key measure of prices showed scant inflation.
Futures on the S&P 500 pushed an advance to 0.5 per cent, while the 10-year Treasury yield slumped. Global stocks pushed forward on an eight-day winning streak on the heels of positive corporate news, improving virus trends and U.S. stimulus plans.
The MSCI World Index gained 0.1 per cent, the longest advance since November. Twitter Inc. shares rose 7 per cent in the U.S. pre-market after reporting a surge in revenue. Lyft Inc. rallied 11 per cent as the co-founder said the ride-hailing company will “absolutely” turn a quarterly profit this year.
Outside of equities, the moves were relatively muted. Oil prices ticked higher, with Brent futures climbing above US$61 a barrel. The dollar was steady ahead of a report on U.S. consumer prices due later on Wednesday. While the reading is expected to be tepid, inflation has quickly become the biggest issue in markets on speculation the Federal Reserve will let the economy run hot out of the pandemic.
“This buy-everything stock rally is defying reality, but the fear of missing out keeps pushing prices higher,” said Peter Rosenstreich, head of market strategy at Swissquote. “The real worry I have is the lack of real issues that would halt the optimism.”
Across markets, the theme continues to be the reflation trade -- the bet that COVID-19 vaccines will restore economic growth and fuel gains in everything from stocks to crude oil. Daniel Tenengauzer, head of markets strategy at Bank of New York Mellon Corp., has warned that if inflation gets hotter than the Fed is aiming for, it may force the central bank to adopt a tool to cap long-term yields, known as yield-curve control.
Elsewhere, platinum rallied to a six-year high on expectations it will benefit from tight supplies and investment demand. Bitcoin fluctuated slipped below US$46,000. Yields on the 30-year Treasury were holding just below 2 per cent after crossing that threshold earlier this week.
In stocks, French investment bank Natixis SA surged 7 per cent after financial group BPCE SA offered to buy out minority shareholders. Tencent Holdings Ltd. drove strong gains in Asia as the company won Chinese regulatory approval to roll out a blockbuster game.
Here are some key events coming up:< >EIA crude oil inventory report comes Wednesday.Federal Reserve Chair Jerome Powell will speak on a webinar Wednesday.The U.S. consumer price index comes Wednesday.Lunar New Year public holidays begin in nations across Asia, with China breaking for a week.Bank of Russia’s policy decision comes Friday.Play Video
These are the main moves in markets:
Stocks< >Futures on the S&P 500 Index increased 0.5 per cent as of 8:39 a.m. in New York.The Stoxx Europe 600 Index gained 0.2 per cent.The MSCI Asia Pacific Index rose 0.7 per cent.The MSCI Emerging Market Index gained 0.8 per cent.The Bloomberg Dollar Spot Index was little changed at 1,125.06.The euro was little changed at US$1.2115.The British pound rose 0.1 per cent to US$1.3834.The Japanese yen weakened 0.2 per cent to 104.80 per dollar.The yield on 10-year Treasuries fell one basis point to 1.15 per cent.The yield on two-year Treasuries was unchanged at 0.12 per cent.Germany’s 10-year yield rose one basis point to -0.43 per cent.Britain’s 10-year yield climbed three basis points to 0.491 per cent.West Texas Intermediate crude gained 0.6 per cent.Gold was little changed at US$1,838.20 an ounce.Sheldon Reback.