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NEW YORK, July 12 (Reuters) – A gauge of global equities closed at a record high on Monday and US Treasury yields held above five-month lows touched last week as investors looked for signs of whether the Delta variant of the COVID-19 coronavirus could hamper economic growth.
A rally in the bond market last week pushed the yield on the benchmark 10-year US Treasury bond to a five-month low of 1.25% as investors feared growing cases of the variant would slow economic recovery. The yield had reached 1.78% in March, as rising vaccination rates fueled growth expectations.
The World Health Organization has warned that the Delta variant is becoming dominant and that many countries have yet to receive enough doses of the vaccine to keep their health workers safe. Read more
Analysts also cited a lack of supply for lower yields. Yields were little changed after the Treasury sold $ 58 billion in three-year notes and $ 38 billion in 10-year notes, with a sale of $ 24 billion in 30-year bonds slated for Tuesday.
The earnings season begins this week and the market will take into account US inflation data on consumer and producer prices as well as comments from Federal Reserve Chairman Jerome Powell. Read more
“The earnings season is going to be warmly welcomed as an opportunity to confirm existing biases,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York.
“Even if the forecast is not as optimistic as the more optimistic had hoped, everything will become more streamlined.”
Benchmark 10-year bonds last returned 1.3712%, down from 1.356% on Friday night.
Equity gains on Wall Street were modest, with financials (.SPSY) the best performing S&P sector of the session ahead of results from JPMorgan Chase (JPM.N), Goldman Sachs (.GS.N) and Bank of America on Tuesday, but the gains were enough to push each of the top three averages to record closing levels.
The Dow Jones Industrial Average (.DJI) rose 126.02 points, or 0.36%, to 34,996.18, the S&P 500 (.SPX) gained 15.08 points, or 0.35%, to 4,384.63 and the Nasdaq Composite (.IXIC) added 31.32 points, or 0.21%, to 14,733.24.
European stocks also advanced to close at a record high 460.83. The pan-European STOXX 600 Index (.STOXX) rose 0.69% and MSCI’s global stock gauge (.MIWD00000PUS) gained 0.50%, closing at a record 727.24.
Investors will watch Powell’s testimony this week after the People’s Bank of China decided Friday night to release $ 154 billion for banks to support economic recovery while the European Central Bank said it will discuss a change of its forward-looking orientations on the direction of its policy next week. Meet. Read more
Crude prices have fallen on fears of slowing economic growth. Read more
US crude was 0.62% at $ 74.10 a barrel and Brent at $ 75.16, down 0.52% on the day.
The safe haven dollar edged up amid concerns about the pandemic and its potential to thwart growth. Read more
The dollar index rose 0.092%, with the euro down 0.1% to 1.1861.
Additional reporting by Noel Randewich; Editing by Dan Grebler, Sonya Hepinstall and David Gregorio
Our Standards: Thomson Reuters Trust Principles.
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