U.S. stocks closed at a record high for a third consecutive trading session amid growing optimism over the budding economic recovery and progress on vaccines. Long-term Treasury yields edged lower.
The benchmark S&P 500 Index gained for a fifth straight trading session, led by the utilities and real estate sectors. The Dow Jones Industrial Average also closed at a record and finished up for the seventh session in a row. Apple Inc., Tesla Inc., and Facebook Inc. led the tech-heavy Nasdaq 100 higher. Crude oil pared a loss of more than 2%.
“U.S. equities have become a buy high, sell higher asset class on the heels of economic reopening optimism, vaccination progress, and additional government stimulus,” said Terry Sandven, chief equity strategist for U.S. Bank Wealth Management. “We’re maintaining our glass half full orientation for equities and that’s a function of favorable fundamental sentiment and technical trends”.
Yields on benchmark 10-year U.S. Treasury notes declined from the more than one-year high reached last week.
Brent crude dropped overnight, erasing again after a raft of economic data from China added to signs of recovery from the coronavirus pandemic. Concerns about tightening liquidity weighed on Chinese shares, with the CSI 300 Index closing down 2.2%.
Investors remain preoccupied with rising long-term borrowing costs and their implications for reflation trades and the rotation in the stock market from growth to value shares.
In the U.S., investors are also considering the potential impact of higher taxes and how that could affect corporate profit growth. President Joe Biden is planning the first major federal tax hike since 1993 to help pay for a long-term economic program, according to people familiar with the matter. The White House is expected to propose a suite of tax increases, mostly mirroring Biden’s 2020 campaign proposals, according to four people familiar with the discussions.
”I think the market will wait a bit longer on the Biden tax story,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “People are going to want to know what is actually proposed, and more importantly, what is likely to make it through Congress”.
Biden Eyes First Major Tax Hike Since 1993 in Next Economic Plan.
Elsewhere, Bitcoin pulled back after a weekend rally that sent prices above $61,000 for the first time. The largest cryptocurrency was trading at about $56,000 on Monday.News Source: Yahoo Finance