European stocks rose on Monday, while US tech stock futures tumbled, with bond yields nearing year-highs as the world’s largest economy was about to add $ 1.9. trillions in stimulus.
Over the weekend, the United States Senate approved its version of the $ 1.9 trillion stimulus package and sent it back to the United States House of Representatives for approval before President Joe Biden can make it law. The rise in bond yields – with the 10-year Treasury TMUBMUSD10Y,
Up to 64 basis points in 2021, through Friday, has led investors to rotate from assets they perceive with stretched valuations, such as companies in the technology sector, and disadvantaged sectors with less demanding valuations.
The Stoxx Europe 600 SXXP,
increased 0.6%, with companies that have fought through the COVID-19 pandemic leading the way. Carnival CCL Cruise Operator,
oilfield services company TechnipFMC FTI,
tourist conglomerate TUI TUI,
and the shopping center operator Klepierre LI,
topped the leader board.
HelloFresh HFG Ready Meal Kit Manufacturer,
and the hydrogen fuel company Nel NEL,
both are up over 100% over the past 52 weeks, down dramatically.
Futures on the Nasdaq-100 NQ00 of heavy technology,
it plummeted 1.6%.
Florent Pochon, a strategist at French bank Natixis, said there are many reasons for markets to be nervous, but he expects any equities tantrum to be limited as long as the Federal Reserve remains dovish.
“In terms of valuation, America’s 10 years seem to be close to fair value, taking into account all the uncertainty that determines what it is,” he said. “As massive as the US fiscal stimulus plan is, it is not expected to generate high structural inflation, but rather to deepen the country’s trade deficit.”
Actions in the educational publishing house Pearson PSON,
it fell as much as 5% before turning around and rising 5%. The company’s results and outlook were largely in line with expectations as it established plans to sell its local international educational material publishing businesses and occupy fewer properties.