Bloomberg
(Bloomberg) -- U.S. stocks gained with European equities even as Treasury yields edged higher as investors rotated into shares of companies whose fortunes are closely tied to the economic cycle.The S&P 500 headed for a second day of gains after selling last week sent it into a 5% tailspin. Material producers and finanical firms led the gains after lagging behind for most of last year. Banks and miners led a rally in Europe on the expectatoin that a more robust vaccine rollout will boost growth in the region. Tech stocks lagged behind as investors continued to question high valuations in an era of higher yields.The 10-year Treasury rate jumped toward 1.6%, while the dollar strengthened. Brent crude briefly traded near $70 a barrel before pulling back. Gold slumped and Bitcoin traded above $51,000.Investors embraced the prospect for a surge in global economic growth as vaccine distribution improves and the U.S. heads toward passing a $1.9 trillion spending bill. The risks associated with rising Treasury yields remain an overhang amid fears that government aid programs could overheat economic growth. “You will see a lot of volatility in markets,” Kim Stafford, Asia Pacific head at Pacific Investment Management Co., said on Bloomberg Television. “We believe that confidence is improving, especially with vaccines coming online, so we will see an uptick in growth globally. There are a lot of reasons to be confident in the market, but a lot of this is also priced in.”There are also questions about whether equity valuations have become excessive, especially in speculative tech shares. The Nasdaq 100 Index has fallen about 8% since early February.Crash Landing on Stock Heroes of Yesteryear Is Worst in a DecadeMeanwhile, China’s main stock benchmark entered a correction on Monday on concerns about liquidity conditions and valuations in some of the recently favored stocks. The CSI 300 Index fell 3.5%, piercing through its 100-day moving average and putting losses from its recent February 10 peak to 13%.Here are some key events to watch:The annual session of China’s National People’s Congress continues in Beijing.Japan GDP is due Tuesday.EIA crude oil inventory report is due WednesdayThe U.S. February consumer price index will offer the latest look at price pressures Wednesday.The European Central Bank holds its monetary policy meeting and President Christine Lagarde is set to do a briefing Thursday.These are some of the main moves in markets: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.
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