By
Steve Muchoki
April 16th, 2024
Stock markets worldwide reacted positively to the drop in the 10-year US Treasury Yield as well as the $1.9 trillion stimulus package approved by the House.
The month of March has kickstarted on a good note as the US stock market surged sharply during the early trading hours. This comes on the backdrop of Treasury Yields retreating from their highs last week. The 10-year Treasury Yield dropped to 1.4290% with Dow Futures (DJIA F) surging 334 points sharps. Similarly, other indices like the Nasdaq 100 futures and the S&P 500 futures also traded in the positive territory. European and Asian markets reacted as well.
Markets remained under pressure throughout last week with concerns over rising bond yields. Bonds and stocks always work contradictory to each other. Growth stocks that rallied the most during the 2020 pandemic were under severe pressure. However, last Saturday, the House passed the much-awaited $1.9 trillion COVID-19 relief bill. The Bill is now under consideration with the Senate. Speaking to CNBC, Jim Paulsen, The Leuthold Group chief investment strategist said:
“Bond market volatility surged to its highest level since April and until some calm and some new peak level of yields is found, this will be the key focus for investors.”
Also, there’s some good news on the vaccine front. On Sunday, the Centers for Disease Control and Prevention advisory panel arrived at the conclusion of using a one-shot of the COVID-19 vaccine by Johnson & Johnson (NYSE: JNJ) for people of 18-years and above. The company has thus expected to use 4 million of such doses.
Asian and European Markets Surge
The drop in the U.S. Treasury Yields has been celebrated by markets worldwide. After last Friday’s 4% plunge, Nikkei 225 jumped 2.41% closing at 29,663. Even the Topic index jumped 2.04% finishing the trading at 1902.48.
Hong Kong’s Hang Seng index advanced over 1.5% closing at 29,452 levels. Similarly, India’s Nifty 50 surged 1.6% closing above 14,750 levels. Over the last weekend, China released its official manufacturing Purchasing Managers’ Index (PMI) for February 2021.
As per the data released by China’s National Bureau of Statistics, the numbers came at 50.6. This is lower than January’s 51.3. This showed that China’s manufacturing activity grew at a slower pace in February. However, anything above 50 suggests economic expansion over contraction.
Soon as the US stock futures rose, the European Market also registered a sharp rise. The pan-European Stoxx 600 jumped 1.7% during the early trade. Leading the European blue-chip index was British housebuilder Persimmon and British Airways parent IAG, both surging 5%.