Global economy is rebounding, with major indexes rallying
The global economy is recovering from the Covid-19 pandemic faster than analysts expected. The U.S. and Chinese data showed that the actual numbers surpassed the initial estimations. Japan, the world’s third greatest economy, is still on a downtrend, but the results could be worse.
On Tuesday, a gauge of global stocks surged forward to its biggest one-day percentage rise in a week. The U.S. Treasury yields tumbled down, alleviating some concerns about the economic recovery and stronger-than-expected inflation.
Benchmark 10-year notes soared to 18/32 in price to yield 1.5316%. However, that was lower than 1.5941% reached later Monday. The note has surpassed 1.6% three times since Feb. 25, skyrocketing to levels not seen over the last year.
Investors are waiting for the $120 billion auctions of 3-, 10- and 30-year Treasuries, which are due later this week. U.S. Andrew Mies, the chief investment officer at 6 Meridien in Kansas, noted that the 10-year has jumped from 1% to 1.60%, and it may even reach 2%.
Meanwhile, all major averages closed higher on Wall Street. The Nasdaq rallied by almost 4%, gaining the most. It reached the highest point since Nov. 4.
According to experts, the index has been highly susceptible to increasing rates. As a result, Monday’s decline pushed it lower by more than 10% from its Feb. 12 close.
How did the Dow Jones and the S&P 500 fare?
The Dow Jones Industrial Average climbed up by 30.3 points, or 0.1%, ending the session at 31,832.74. Earlier in the day, it briefly surpassed 32,150, though.
The S&P 500 also added 54.09 points, or 1.42%, climbing up to 3,875.44, while the Nasdaq Composite soared by 464.66 points, adding 3.69%, to 13,073.83, overall.
In Europe, the futures closed higher as well, extending gains from their best session in four months on Monday. The European STOXX 600 index jumped by 0.8%, with the utility sector climbing up by more than 1.5%.
According to new data, the ECB increased its emergency bond purchases insignificantly last week. Investors are currently waiting for a European Central Bank meeting, which is due later this week. It will clarify whether policymakers have decided to increase the pace of emergency bond purchases.
Meanwhile, MSCI’s gauge of stocks soared by 1.35% in Asia. Oil prices tumbled down from early highs in choppy trading, though. Brent dropped back to the $68 mark as traders contemplated supply disruption in Saudi Arabia.
U.S. crude futures traded at $64.01 per barrel, also lowering to $1.04 by 1.60%. Brent crude futures sat at $67.52 per barrel, declining to 72 cents by 1.06%.
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