European and US Stocks Hit Covid Peaks on Biden’s Stimulus Hopes | Deal

Stock prices in the US and Europe have reached their highest levels since the start of the pandemic as optimism grows that Joe Biden’s $ 1.9 trillion stimulus package can jumpstart an economy. global hit without triggering an increase in inflation.

Demand for US tech stocks sent the Dow Jones Industrial Average above the 32,000 level for a brief period, while the Stoxx 600, a key index of European stocks, closed at its highest since late February last year. .

The optimistic mood in financial markets was reflected in a jump of more than 27% in the US computer game retailer GameStop to $ 246.90. Stocks soared to nearly $ 400 earlier this year when small investors came together to acquire hedge funds that were hoping to profit from falling stock prices.

The shares subsequently fell back to around $ 40, but have rebounded over the past week after the company announced plans to move online. The move will be led by a major shareholder, Ryan Cohen, co-founder of an online pet products business.

Cohen took a large stake in GameStop last year when the stock was between $ 6 and $ 18, and has been pushing to move away from its traditional business model to become a technology-driven business focused on games and digital experiences.

US markets were generally stronger on optimism that some of the money that will be sent directly to US households as part of Biden’s stimulus plan will be invested in the stock market. All U.S. markets closed higher on a renewed appetite for tech stocks that pushed the Nasdaq higher 3.7% with Tesla, which has suffered big losses this year, and one of the biggest gains was up a 19.6%.

Bitcoin was on track for a fifth day of gains at just over $ 54,000, with some analysts predicting that it would hit a record high of $ 60,000 by the end of the week.

London’s main stock price index, the FTSE 100, closed 11 points higher at 6,730, its highest level in three weeks, but still well below its level in early 2020 before the arrival of Covid- 19.

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The rebound in US tech companies came as US government bond prices strengthened, pushing down yields that had risen as investors had anticipated higher inflation and higher inflation. the risk that interest rates will rise earlier than expected.

Fawad Razaqzada, an analyst at ThinkMarkets, said it could be the “calm before the storm,” noting that concerns about high valuations of tech companies had surfaced in recent weeks.

“Obviously I don’t have a crystal ball, but I’m not really sure that US stocks can keep up,” he said.

“Of course, markets can outperform amid euphoria, but ultimately, if concerns about tighter monetary conditions intensify, investors seeking returns could be lured by the ‘safer’ yields in the bond markets. rather than stocks, as returns continue to rise. “


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