World stock hit a record high as did Emini S&P equity futures, which topped 3,900 on Monday, while the 30Y TSY hit 2.00% and Brent surpassed $60 a barrel for the first time since January amid a wholesale rush in reflation trades on hopes that a $1.9 trillion COVID-19 aid package will be passed by U.S. lawmakers as soon as this month after Janet Yellen pushed for rapid stimulus and coronavirus infections slowed across the globe. Gold, bitcoin and dollar all rose as well amid a “buy everything” wave.
MSCI’s index of world stocks hit its ninth record high of 2021 overnight as Tokyo’s Nikkei jumped on talk of Japan relaxing emergency restrictions and as China’s markets got busy before the start of the lunar new year. Investors chased risk assets, comforted by the continued rollout of vaccines and data showing a collapse in new hospitalizations and infections in countries like the U.S. Optimism was boosted after Treasury Secretary Yellen said on Sunday that the U.S. could return to full employment in 2022 if it enacts a robust enough relief package.
“That’s a big call, given full employment is 4.1%, but one that will sit well with the market at a time when the vaccination program is being rolled out efficiently in a number of countries,” said Chris Weston, Melbourne-based chief strategist at Pepperstone.
On Friday, Joe Biden and his Democratic allies in Congress forged ahead with their stimulus plan on Friday as lawmakers approved a budget outline that will allow them to muscle through in the coming weeks without Republican support. Weaker-than-forecast U.S. jobs data Friday reinforced economic risks as the pandemic lingers, but also highlighted the case for further stimulus.