Stimulus, vaccine optimism supporting gains in global stocks. Most major international indexes extended Monday’s US gains overnight as investors digest Europe’s approximately $850 billion fiscal stimulus package and continued positive news on vaccine progress. Tech-related stocks led yesterday’s rally amid narrow sector leadership gains after some high-profile names lagged last week. The S&P 500 Index is higher early this morning as we move into the heart of earnings season.
Falling real yields may be more optimistic than they appear. Real yields (yields excluding inflation) have been falling, to the benefit of Treasury Inflation-Protected Securities (TIPS) investors. Usually, falling real yields mean lower growth expectations, but in this case, with Treasury yields flat, it could mean normalizing inflation expectations and strong confidence central banks will remain supportive. For more on real yields and our view of TIPS, see today’s LPL Research blog.
COVID-19 news. Growth in cases slowed again Monday, as Johns Hopkins reported 56,800 new cases in the United States, down 4.2% over the past week on a 1.8% increase in tests. New York City has moved to the next phase of its reopening, while California reported slowing growth in hospitalizations. European Union leaders agreed to a 750 billion euro pandemic relief package.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
All index and market data are from FactSet and MarketWatch.
This Research material was prepared by LPL Financial, LLC.
Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.
- Not Insured by FDIC/NCUA or Any Other Government Agency
- Not Bank/Credit Union Guaranteed
- Not Bank/Credit Union Deposits or Obligations
- May Lose Value
For Public Use – Tracking 1-05035325