Global benchmark Brent hit $67.45 a barrel while West Texas Intermediate rose to $64.58.
Investors poured back into the market’s riskiest assets Tuesday as dip-buyers powered the Nasdaq 100 to its biggest rally since April and sent Bitcoin back toward a record. Treasuries added to gains after a note auction.
Stay-at-home winners surged after being left for dead as vaccinations pick up and Democrats move to inject $1.9 trillion into the economy. Treasury yields pulled back from recent highs sparked by worries a potential overshoot in the economy will bring inflation. For a day, at least, the rotation from growth shares to value reversed violently. Here are some of the major moves:
The rising prospects for turbo-charged economic growth have been reordering the market’s winners and losers for the past two months as the stimulus bill’s passage grew more likely and daily vaccinations surged. Tuesday, dip buyers targeted the areas recently abandoned as too expensive. The reversal is a theme that’s played out for years, every retreat gets bought, and it’s been extreme lately. The S&P 500 hasn’t had a pullback of 5% since November.
The drop in Treasury yields after the recent violent runup has given some cover for risk takers to wade back into growth after abandoning the group because stretched valuations began to look scary with rates on the rise.
“Let’s not forget that less than a year ago traders interpreted one of the biggest negative macro events in market history as a buying opportunity, so there’s little reason to think otherwise given all the positive signals around us today,” said Chris Larkin, managing director of trading and investing product at E*Trade Financial. “Corrections create natural inflection points for traders. It’s no surprise to see the Nasdaq rise today, and the fundamentals support continued bullishness.”
The first of several Treasury sales in the coming days went off without disrupting markets. The sales will test appetite for the safest debt after last month’s poorly bid auctions sent shockwaves throughout global markets and short bets climbed to a record. Benchmark 10-year yields breached the 1.6% level to trade at a one-year high last week.
Here are some key events to watch: