U.S. equities rose to record highs as the Covid-19 immunization drive was bolstered by U.S. regulators granting full approval for the vaccine made by Pfizer Inc. and BioNTech SE.
The S&P 500 and Nasdaq 100 rebounded from lows last week as the approval could lead to more vaccine mandates amid a surge in delta variant cases that has threatened the momentum of the global economic recovery. Mixed U.S. data Monday showed July home sales coming in higher than expected while growth at U.S. services and factories slowed to an eight-month low.
Treasuries were little changed and the dollar slipped as investors also looked ahead to the Jackson Hole symposium Thursday, which may offer insights into how and when the Federal Reserve plans to taper bond purchases.
“Amid another record high last Monday it’s remarkable that we’re looking to start the week yet again on the upside,” said Chris Larkin, managing director of trading at E*Trade Financial. “The gains last week couldn’t make up for the losses following the Fed confirming its intentions to taper its purchasing program. All eyes will remain on the Fed as investors will be looking for more guidance on the taper from Powell’s speech at Jackson Hole.”
Dallas Fed President Robert Kaplan said he’s open to adjusting his view that the Fed should start tapering its asset-purchase program sooner rather than later if the delta strain persists and hurts economic progress. Meanwhile, Treasury Secretary Janet Yellen has endorsed Jerome Powell for a second term as Fed chair, a move that could reduce uncertainty about the path for monetary policy.
Oil rose above $65 a barrel, gold climbed to $1,800 and Bitcoin retook $50,000 for the first time since mid-May.
In Europe, the Stoxx Europe 600 index increased for a second day, while in Asia equities in China and Japan also gained. China has once again brought local Covid-19 cases down to zero.
Here are some events to watch this week:
- U.S. Markit manufacturing PMI and existing home sales Monday
- Bank of Korea policy decision; briefing by Governor Lee Ju-yeol Thursday
- Fed officials attend the Jackson Hole Economic Policy Symposium from Thursday through Saturday
- U.S. GDP, initial jobless claims Thursday
- July U.S. personal income and spending data Friday. Investors will scrutinize the personal consumption expenditures price index, an inflation measure closely watched by the Fed.
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.9% as of 10:57 a.m. New York time
- The Nasdaq 100 rose 1.2%
- The Dow Jones Industrial Average rose 0.7%
- The Stoxx Europe 600 rose 0.7%
- The MSCI World index rose 1.1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.4%
- The euro rose 0.4% to $1.1740
- The British pound rose 0.7% to $1.3718
- The Japanese yen was little changed at 109.74 per dollar
Bonds
- The yield on 10-year Treasuries was little changed at 1.26%
- Germany’s 10-year yield advanced one basis point to -0.48%
- Britain’s 10-year yield advanced two basis points to 0.54%
Commodities
- West Texas Intermediate crude rose 6.1% to $65.92 a barrel
- Gold futures rose 1.3% to $1,807.70 an ounce
