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(Bloomberg) – Markets have started the week in the green, with tech stocks climbing and investors continuing to focus on the US administration’s $ 1.9 trillion Covid-19 relief plan.
Futures contracts on the Nasdaq 100 index added almost 1%, outperforming contracts on the Russell 2000 index of small-cap stocks. In Asia, the Chinese internet company Tencent Holdings Ltd. climbed 11%, the biggest gain since 2011, as mainland traders triggered a stock and option buying spree.
The situation was more mixed in Europe, with benchmarks for equities in France, Spain and the UK falling slightly. Crude oil in New York climbed to $ 53 a barrel and Bitcoin rebounded above $ 33,000. The dollar and the euro were stable.
After ending last week on a rocky note, global equities are resuming their upward march, seemingly confident Democratic lawmakers will be able to push forward their sweeping stimulus package in the face of Republican pressure. Equally important to the market will be the profit parade this week, with America’s biggest tech giants, including Apple Inc., Tesla Inc. and Facebook Inc., due to release the results.
“The Federal Reserve, the pursuit of the profit chain with great tech ahead and the fear of missing the market is driving the stock market,” said Sebastien Galy, senior strategist at Nordea Investment Funds. “We expect the Fed to push back on the notion of tapering and that should support risky assets.”
The combination of record stock prices, extreme gains in everything from Bitcoin to shares of GameStop Corp. and Tencent, as well as investor exuberance is reigniting the debate over whether the central bank’s lavish stimulus has created asset bubbles.
While corners of the US equities universe are showing signs of foaming, this should not endanger the market as a whole, said Goldman Sachs Group Inc.
“Pockets of the market recently appeared to demonstrate consistent investor behavior with bubble sentiment,” strategists including David Kostin wrote in a note Friday. “But these excesses present a low systemic risk for the entire market given their modest share of market capitalization.”
Here are some key events coming up in the coming week:
Microsoft Corp., Apple Inc., Tesla Inc., Facebook Inc., UBS Group AG and Samsung Electronics Co. are among the companies reporting the results. Chinese President Xi Jinping is due to speak at the World Economic Forum on “l ‘Davos Agenda 2021’ online People’s Bank of China Governor Yi Gang and European Central Bank chief economist Philip Lane speak at a conference Monday. U.S. housing and consumer confidence are reported Tuesday. The Federal Open Market Committee Powell’s monetary policy decision is slated for Wednesday. Fourth-quarter GDP, initial jobless claims and new home sales are among data released Thursday in the United States.
Here are the main movements in the markets:
Stocks
Futures on the S&P 500 Index gained 0.4% at 9:55 a.m. London time. The Stoxx Europe 600 index rose 0.1%. The MSCI Asia Pacific index rose 0.9%. The MSCI Emerging Market Index climbed 1.1%.
Currencies
The Bloomberg Dollar Spot Index gained 0.1% to 1,123.57, the euro fell 0.2% to $ 1.215, the British pound fell 0.1% to $ 1.367 and the Japanese yen fell short ranged to 103.80 to the dollar.
Obligations
The yield on 10-year Treasuries fell less than a basis point to 1.08%. The yield on two-year Treasuries gained less than a basis point to 0.12%. Germany’s 10-year yield fell two basis points to -0.53%. – the annual yield fell by two basis points to 0.286%.
Basic products
West Texas Intermediate crude rose 1.3% to $ 52.66 per barrel, while gold was little changed at $ 1,855.70 per ounce.
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