Shares on Wall Street close the week on record
U.S. stocks and bonds rallied this week, leaving the main barometer of Wall Street shares on record as the latest signs of the country’s economic recovery have led to a shift to U.S. assets.
Economic reports indicating acceleration improvement in the labor market and a blow to consumer spending stimulates boosted the desire of foreign and domestic investors for U.S. securities.
The rise in shares and bonds in tandem goes against normal market dynamics, but the intersection of factors has boosted the two markets this week, analysts said. The S&P 500 share index gained 1.4 percent over the period, leaving more than 5 percent at the end of March, which would be its third consecutive month of progress.
The economically sensitive S&P 500 sectors, such as energy, finance and industry, have been in the lead since the end of January, each with about a fifth.
“As economic reopening accelerates in the coming months, we believe the bull market remains a solid foundation,” said Mark Haefele, investment director at UBS Wealth Management. “We maintain cyclical bias and prefer US consumer discretion, energy, finance and industry.”
The wealthy money management team on Friday raised the S&P 500 target to 4,400, and said it expects the gauge to be based on its record highs and reach another 5 percent by the end of 20%.
This sense of economic excitement sparked a major setback in the long run U.S. government bonds during the first quarter of this year. However, over the past two weeks the direction of travel has begun to change.
The yield on the 10-year Treasury note, a key benchmark in fixed income markets, fell 0.14 percentage points to 1.6 percent in the last fortnight, marking the biggest two-week drop in the summer of last year. . The yield, which moves in the opposite direction to the price, was up 1.77 percent on March 30th.
The recent pick-up of demand has left some investors and analysts scratching their heads, especially as data released on Thursday showed U.S. retail sales fell the most in the past month in 10 months, with Americans filing for the first. unemployment benefits have dropped to the lowest level coronavirus crisis. Usually, such optimistic news takes investors away from this paradise debt.
However, investors have pointed out that the foreign demand for the Treasury is increasing, as it still provides more than many other peers in the world, as a reason for the lively rally.
The strong 30-year Treasury bond sale on Tuesday helped build confidence in the market since then there have been concerns investor demand to see if it will be enough to absorb the big wave of debt issued. Investors are expected to see a close-up of the $ 24 billion bond in 20-year bonds on Wednesday for more information.
Subadra Rajappa, head of U.S. rate strategy at Société Générale, said the huge sales in the first three months of this year tend to revive the market abruptly. “Immunity from the U.S. Treasury in the face of increasingly strong data proves that the positive results of growth and inflation are better served,” he said.
“We don’t notice much change in the message the finance market sends us, but we wouldn’t think that yields will recover from the endless rise as they go“ with their bases, ”Roberto Perli added. , An economist at Cornerstone Macro.