Concerns about inflation were tempered on Wednesday by data showing just a 0.1% rise in core consumer prices last month, helping stocks rally and bond yields ease.
The Dow Jones Industrial Average finished above 32,000 points for the first time on Wednesday with gains continuing into Thursday, and bond yields are falling globally. And there is a good chance this period of calm in bonds will last, according to analyst Jani Ziedins of the popular CrackedMarket blog.
With stocks up again, investors need to watch technology stock favorites as bellwethers that the bull market will keep charging, said Ziedins in our call of the day.
According to Ziedins, the latest run-up in bond yields was likely triggered by “a contagious wave of herd selling” that got carried away.
“Now that the selling in the bond market is taking a break, there is a good chance this period of calm will persist,” Ziedins said. “Bonds holding these levels for several days suggest the worst could already be behind us.”
With stocks up, investors should watch the FAANG group — Facebook FB,
“We cannot go higher without the best-of-the-best stocks leading the charge. If the FAANG stocks cannot get their act together, they threaten to take everything down with them,” Ziedins said.
But Ziedins said that if FAANG stocks manage to “show some life,” and keep it up, that could send indexes to record levels.
Ziedins’ advice for investors is to keep holding for higher prices. As long as the S&P 500 index remains above 3,800 points, “the bull market is alive and well,” he said.
On the U.S. economic front, all eyes are on initial jobless claims. 712,000 Americans filed for unemployment last week, compared with 725,000 expected, marking a decline from 745,000 initial claims in the week prior. There were 4.14 million continuing jobless claims in the week of February 27. There were 6.9 million job openings in the month of January, outpacing expectations of 6.7 million.
The European Central Bank said it will accelerate the bond-buying program it launched in the early days of the pandemic, as the central bank faces rising bond yields that threaten to undermine its monetary policy.
Vir Biotechnology VIR,
Denmark, Norway, and Iceland have temporarily halted injections of the COVID-19 vaccine developed by AstraZeneca AZN,
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American Airlines AAL,
Stock markets climbed further into the green DJIA,
Our chart of the day, from Goldman Sachs, shows that the U.S. debt-to-gross domestic product will soon rise to the highest level in U.S. history. That ratio has long been the benchmark for fiscal sustainability.
But the investment bank pointed to a recent study — by Jason Furman and Lawrence Summers — arguing that there is a better way of measuring the debt burden. Instead, focus on the cost of servicing the debt as a share of GDP, shown in the two charts below. While debt levels are historically high, interest rates are historically low, so the cost of servicing the debt is at a more normal level.
Just Eat delivery driver steals cat from customer’s building “to deal with mouse infestation at restaurant.”
A trader bought $36 million of copper and got painted rocks instead. Oops.
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