Bond Yields Rise; Stocks Edge Down as Metals Jump: Markets Wrap

Bond Yields Rise; Stocks Edge Down as Metals Jump: Markets Wrap

(Bloomberg) -- The bond selloff continued Monday as Treasury yields climbed and sovereign debt in Australia and New Zealand slid on concerns about faster inflation, tempering stock market optimism from positive vaccine news.

Benchmark 10-year Treasury yields climbed to the highest in about a year. A gauge of Asian stocks edged lower, erasing earlier gains amid a surge in metals that could fan price pressures. Japanese shares outperformed while other key markets lagged. S&P 500 and European futures dipped after the U.S. index slipped Friday.

Copper hit the highest in more than nine years in a sign of optimism about the global recovery. Crude oil climbed to $60 a barrel as the market assessed the fallout from the big freeze across Texas. Bitcoin notched another record over the weekend, spurring a rally in the shares of Asian cryptocurrency stocks.

Sovereign bonds have slid on expectations vaccines and more fiscal stimulus will spur a global economic rebound and fan inflation. In Israel, the Pfizer Inc. and BioNTech SE Covid-19 shot appeared to stop the vast majority of recipients from infection. Progress against the disease has aided stock and commodity markets this year, but investors are also asking whether the reflation trade will drive up yields to a point that eventually hurts risk appetite.

“We are still in a risk-on environment,” Adrian Zuercher, head of global asset allocation at UBS Wealth Management, said on Bloomberg TV. “Everybody is playing out the outlook for better economic growth, the outlook for more fiscal stimulus. It’s normal that nominal yields are trending higher, equities are also trading high, and also commodities based on a better economic outlook.”

Read: Inflation Angst Is About to Rewrite the Stock Market Playbook

U.S. lawmakers are also expected to make progress on a $1.9 trillion stimulus bill, and President Joe Biden’s administration may unveil a multitrillion-dollar recovery package in March centered on infrastructure.

In Australia, the central bank resumed purchases of three-year securities to defend its yield target. Benchmark bonds also fell in New Zealand, whose currency was boosted by a sovereign credit-rating upgrade before paring the advance.

Some key events to watch this week:

Fed Chair Jerome Powell delivers the central bank’s semi-annual monetary policy report to the Senate Banking Committee on Tuesday.EIA crude oil inventory report is out Wednesday.Bank of Korea monetary policy decision is out Thursday.Finance ministers and central bankers from the Group of 20 will meet virtually Friday. U.S. Treasury Secretary Janet Yellen will be among the attendees.

These are some of the main moves in markets:

Stocks

S&P 500 futures fell 0.2% as of 5:50 a.m. in London. The S&P 500 index fell 0.2% Friday.Japan’s Topix index rose 0.6%.Australia’s S&P/ASX 200 Index fell 0.2%.Hong Kong’s Hang Seng Index lost 0.2%.Shanghai Composite Index lost 0.3%.Euro Stoxx 50 futures fell 0.4%.

Currencies

The yen was at 105.65 per dollar, down 0.2%.The offshore yuan was at 6.4624 per dollar, down 0.1%.The euro was at $1.2121.The Bloomberg Dollar Spot Index was flat.

Bonds

The yield on 10-year Treasuries rose about five basis points to 1.38%.Australia’s 10-year bond yield rose 17 basis points to 1.60%.

Commodities

West Texas Intermediate crude increased 1.4% to $60.05 a barrel.Gold rose 0.3% $1,788.76 an ounce.

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©2021 Bloomberg L.P.

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    This weekend's Barron's cover story explores one enterprise software company's transformation into a cloud giant. Other featured articles discuss who dominates the public cloud, who stands to benefit as Texas rebuilds and how to tell when tech companies are overvalued. Also, the prospects for a private-equity giant, an engineering company, bank stocks, business development companies and more. Cover story "Oracle Is Turning Into a Cloud Giant. Why Its Stock Is a Buy" by Eric J. Savitz discusses how a new giant is starting to flex its muscles in cloud computing, and it isn't some upstart. See why Barron's claims that enterprise software company Oracle Corporation (NYSE: VZ) has been undergoing a Microsoft-like reinvention, and why that makes the stock a buy. Avi Salzman's "Texas Looks to Rebuild. Here Are 6 Stocks That Could Benefit" suggests that companies that provide energy infrastructure and oil-and-gas producers that were spared storm damage in Texas offer opportunities. What does that mean for the likes of Eaton Corporation PLC (NYSE: ETN), Hess Corp. (NYSE: HES) and even General Electric Company (NYSE: GE). In "Who Rules the Cloud? The Answer Is Hazy," Eric J. Savitz points out that the data showing who dominates the U.S. public cloud market are obfuscated by definitions that can make comparisons among providers such as Amazon.com, Inc. (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT) almost impossible. Is that a problem? Private-equity giant Blackstone Group Inc (NYSE: BX) is pushing hard into life sciences at a critical time, according to "Blackstone Makes a Big Bet on Life Sciences" by Liz Moyer. See what that means for Medtronic PLC (NYSE: MDT), Moderna Inc (NASDAQ: MRNA) and a number of others. In Daren Fonda's "Fluor Is Engineering a Turnaround. Its Stock Could Soar," the focus is on how engineering and construction company Fluor Corp (NYSE: FLR) is pivoting toward growth industries and fixing its past problems. Find out why the Texas-based company could be a beneficiary of U.S. infrastructure spending and why Barron's sees the share price rising as much as 80%. "Tech Valuations Are Getting Scary. Here's How We Know" by Eric J. Savitz explains that companies such as Snowflake Inc (NYSE: SNOW) and Zoom Video Communications Inc (NASDAQ: ZM) trade at more than 35 times sales estimates for 2021. That doesn't leave much room for error, and Wall Street doesn't seem to be concerned. See also: Benzinga's Bulls And Bears Of The Week: Disney, QuantumScape, Tesla, Walmart And More A Goldman Sachs strategist lays out the case for stocks to shine, which includes an accelerating vaccination program and a $1.9 trillion stimulus bill. So says Jack Hough's "Welcome to Earnings Valhalla. Why Stocks Can Still Shine." Find out what Barron's thinks that could mean for everything from Facebook, Inc. (NASDAQ: FB) to 3M Co (NYSE: MMM). In "Bank Stocks Are Getting Hot. They Still Have Room to Run," Carleton English says that bank stocks today trade roughly where they did a year ago, with the KBW Bank Index up more than 16% this year, outpacing the S&P 500's 4% gain. Find out if Bank of America Corp (NYSE: BAC) or JPMorgan Chase & Co. (NYSE: JPM) are among those with room to run. Alexandra Scaggs's "BDCs Yield Around 9%, but Their Quality Varies. Here's How to Judge Them" explains that business development companies such as Owl Rock Capital Corp (NYSE: ORCC) are reporting earnings, and income investors should consider paying attention to the status of their loan portfolios for some attractive yield. Also in this week's Barron's: What investors want to see in Warren Buffett's letter to shareholders The latest Barron's annual ranking of the best fund families What it means for interest rates that the doves are in charge again How much equity investors care about rising rates A review of a century of infrastructure projects and costs Why this bull market shows no sign of ending soon What Carl Icahn plans for an Ohio-based electric utility Whether investors should worry about bitcoin mining in China An international fund that stays a step ahead of Wall Street analysts The next smart-beta category What to expect as food prices continue to rise Three retirement savings tricks At the time of this writing, the author had no position in the mentioned equities. Keep up with all the latest breaking news and trading ideas by following Benzinga on Twitter. See more from BenzingaClick here for options trades from BenzingaThe Past Week's Notable Insider Buys: More Biotech IPOs, Bumble, Fiserv And MoreBenzinga's Bulls And Bears Of The Week: Disney, QuantumScape, Tesla, Walmart And More© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Gold’s Near-Term Brush with The 1600s

    No, we’re not revising downward our Gold forecast high for this year of 2401.

  • Chipotle, DocuSign Lead Five Stocks Near Buy Points

    Chipotle, a hot IPO, a work-from-home play, an under-the-radar 5G chip stock and a homebuilder make up five stocks near buy points.

  • Rupee Bounces From Worst Asia Currency on Flood of Stock Inflows

    (Bloomberg) -- The Indian rupee is turning a corner, as massive inflows into the nation’s stock markets help the currency break past the central bank’s intervention barrier.Asia’s weakest currency last year is now among its best performers. The rupee has gained 0.6% this year against the dollar, and there are signs it could keep rallying.A recovering economy and an expansive budget are luring global funds to India’s equities, with investors buying almost $4 billion of stocks this month, the most in Asia’s emerging markets after China. That’s posing a challenge to the Reserve Bank of India, which has been intervening in currency markets to keep the rupee competitive.The rupee rose to 72.57 per dollar last week, its highest since March. That’s likely to clear the path for its advance to 72 per dollar, technical charts suggest. Analysts surveyed by Bloomberg see the currency hitting that level by the fourth quarter.Moreover, bullish momentum for the rupee could pick up if the exchange rate breaks past the 100-week moving average barrier that’s held since April 2018.Impetus for more gains could come this Friday with the latest economic growth figures. Economists expect the data to show that India exited a recession with a 0.5% expansion year-on-year in the fourth quarter.The RBI’s accumulation of dollars in 2020 had held back the rupee, as it built up a record foreign reserves. Nomura Holdings Inc. estimated that the central bank purchased $126 billion from the currency market in 2020, or about 4% of its GDP, mostly offsetting inflows.The tussle between the central bank and bullish traders though is set to continue, with Governor Shaktikanta Das signaling last month that the RBI won’t relent on building up its foreign-exchange reserves.“While we may see INR strengthening further in the near-term on supportive inflows, we are cautious on the medium-term outlook,” said Divya Devesh head of Asean and South-Asia FX research at Standard Chartered Bank in Singapore. “Rising crude oil prices and a widening trade deficit will likely emerge as important headwinds as the year progresses,” he said.Below are the key Asian economic data and events due this week:Monday, Feb. 22: South Korea 20-days exports/imports, Japan PPI services, Thailand customs tradeTuesday, Feb. 23: South Korea consumer confidence, Singapore CPIWednesday, Feb. 24: RBNZ policy decision and news conference, Australia 4Q construction work done and wage price index, South Korea business surveys, Malaysia CPIThursday, Feb. 25: Australia 4Q private capex, New Zealand business confidence, Bank of Korea rate decision, Thailand BoP current account balanceFriday, Feb. 26: India 4Q GDP, New Zealand trade balance and consumer confidence, Japan industrial production and retail sales, Singapore industrial production, Malaysia trade balanceFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Forget Nokia, These Are the Best 5G Stocks to Buy Now

    Short-squeeze mania is still hot, but these three stocks could deliver bigger wins over the long term.

  • This Vanguard ETF Could Make You a Multimillionaire With Zero Effort

    One popular type of investment is the exchange-traded fund (ETF), a group of stocks or bonds packaged together into a single investment. The Vanguard S&P 500 ETF (NYSEMKT: VOO) tracks the S&P 500. In many cases, lower-risk investments also tend to see lower returns.

  • Canada’s First Bitcoin ETF Hits $421.8M AUM in Two Days

    One analyst said the ETF could reach $1 billion in assets under management by the end of next week.

  • Powell testifies before Congress, Airbnb and DoorDash debut earnings: What to know in the week ahead

    Investors this week are gearing up to hear from Federal Reserve Chair Jerome Powell in his semiannual monetary policy testimony before Congress, and to receive another set of corporate earnings results from some newly public companies.

  • Citi Executive Pulls James Bond Stunts to Woo China’s Rich

    (Bloomberg) -- A man in a tuxedo sits at a mountaintop bar. His phone buzzes and he springs into action, stepping into ski boots and racing down the slopes. He is Buckley, Darren Buckley, head of consumer banking for Citigroup China, and also the star of the bank’s James Bond-inspired marketing campaign.In a dozen short videos posted on CitibankChina’s official account on Douyin, the Chinese iteration of TikTok, Buckley’s 007-style character rides motorcycles, masters kung fu and pulls fire out of thin air. He’s often in pursuit of a glamorous, dark-haired woman, played by Buckley’s real-life wife, Aphitchaya Boonkhong.“We are a highly regulated business, but it doesn’t mean we can’t be fun,” Buckley said in an interview. After doing his first spot in June, “I said, you know what, why don’t we play around with this.”Having a senior banking executive star in a dozen online ads marks the most recent unconventional bid for attention by a financial services firm eager to make an impression on China’s emerging investor class. Fund managers and research analysts have launched live streams, banks and brokerages have been slashing fees and offering free gifts, all in an effort to stand out in a crowded marketplace.Citi’s marketing team came up with a video to attract the online audience, and Buckley volunteered. The 20-second video posted on June 4 garnered 2.3 million views in a week.“There were so many comments,” said Buckley, including users who complimented Citi and those who said he looked like Bond. During one prolific Saturday, he wrote eight little scripts and sent them to his marketing team.Citi is one of 100 banks, including foreign rivals like HSBC Holdings Plc. and Standard Chartered Plc., pitching Chinese consumers, many of whom already have a card from one of the country’s state-owned banks. As of June, 2020, the top 20 Chinese banks controlled 99% of China’s credit card issuance, according to Dong Zheng, an independent researcher who has covered China’s credit card industry for over two decades. That leaves the private institutions to scrap over the remaining 1% or to persuade shoppers they need a second or third card.For Citi, the world’s largest credit-card issuer, cards are seen partly as a tool to attract affluent new customers and then to sell them other services. The assets controlled by China’s wealthiest people are expected to double from 2019 to 116 trillion yuan ($18 trillion) by 2025, according to UBS Global Research.“Wealth management is the crucial battleground for financial services firms in China, be it local or foreign,” said Zhang Xiaoxi, a Beijing-based analyst at Gavekal Dragonomics. “You need to find your niche and differentiator. Credit cards could be a starting point.”The popularity of phones and social media has also given new reach to overseas institutions, which have only a tiny physical presence compared with China’s massive state banks. Across Asia, Citi has issued over 16 million cards, with more than one in three cards acquired digitally. In China, all cards were acquired digitally as the bank no longer had any direct sales, according to Buckley.Citi’s viral videos promote its Prestige Card, which requires applicants to have at least 30,000 yuan of monthly income. Sign-up incentives include more than 500,000 bonus points or fancy carry-on luggage. Those perks are nice, Dong said, but they don’t stand out.“To get their attention, you need the visual elements on social media -- which is quick, powerful and widespread in China,” he said.So far, Citi’s campaign has gotten plenty of feedback, generating applause online and compliments from customers and institutional clients. Coca Cola’s Greater China and Korea president Curt Ferguson joined in for one of the videos. When Buckley spoke at a recent conference in Shanghai, other participants jokingly called him James Bond.More importantly, the bank’s local wealth business has grown despite the pandemic. Buckley credits Douyin and other social media campaigns with bringing in new users, and the number of clients with more than $1 million in assets at the bank grew 60% in 2020.Meanwhile, Buckley hasn’t been able to persuade his boss, Citigroup China head Christine Lam, to play M in the Bond series. The marketing team outside China is yet to embrace the strategy for a global audience.“At this stage, they don’t know what to make of them,” said Buckley, a 28-year veteran of the bank. “They like them. They’re surprised by them. Maybe one day they’ll start using them.”(Updates with Citi’s Asia credit card issuance in the 10th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Buzz Aldrin on NASA rover Perseverance landing on Mars

    Apollo 11 astronaut reacts to NASA's Mars rover landing and possible manned mission to the red planet on 'Cavuto Live'

  • Chip Shortage Latest: Taiwan Says Semiconductor Makers On Top Of It, VW Labor Leader Says Golf Models Under Pressure

    A shortage of computer chips is causing automakers to scale back production and raising questions over supplies to other sectors such as consumer electronics. Here's the latest: "Manufacturers are doing what they should," said Taiwan Economy Minister Wang Mei-hua, as reported by Reuters. Taiwan, home to Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM), is a major source of the world's chips. TSMC has almost a 56% market share among the world's chip foundries. Wang said on Saturday that she has met with companies in recent weeks and that she received a letter Friday night from the White House about the problem. "We are helping as much as we can," she said. Foxconn, another Taiwanese company, also is trying to calm nerves. The Apple supplier's chairman, Liu Young-way, said on Saturday that the shortage will have only "limited impact" on Foxconn and its clients. "Since most of the customers we serve are large customers, they all have proper precautionary planning," he said. A labor leader for Volkswagen AG (OTC: VWAGY) reportedly said the German automaker's biggest plant, in Wolfsburg, is facing shortages of semiconductors and also battery cells. This is making it hard to meet demand for Golf models, including hybrids. The shortage has hit automakers hardest as sales rebound from pandemic lockdowns faster than expected, at the same time that demand for electronic devices shot up and the effects of the pandemic hit supply chains. The auto industry stands to lose $61 billion in sales this year, Bloomberg reported earlier. Photo by Nina Rizzo on Unsplash. See more from BenzingaClick here for options trades from BenzingaUS Senate Votes 57-43 To Acquit Trump In Impeachment TrialDating-App Industry Veteran Sam Yagan Files For New SPAC, Looking To Raise 0 Million© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.