published on 03/01/2021 at 10:30 p.m.
Photo credit © Reuters
(Boursier.com) – After a week of correction, Wall Street started rising again on Monday, supported by the adoption by the House of Representatives of the $ 1.9 trillion Biden plan, as well as by more vigorous manufacturing activity indicators than expected in the United States and the euro zone. Bond markets have calmed down after last week’s tensions on sovereign debt. Jerome Powell’s statements ruling out any monetary tightening by the Fed for a long time helped reassure markets.
At the end of this first session in March, the Dow Jones regained 1.95% to 31,535 points, while the broad index S&P 500 advanced 2.38% to 3.901 pts, and the Nasdaq Composite, rich in technological and biotech stocks, rebounded 3.01% to 13.588 pts.
Last week, the DJIA fell 1.8%, the S&P 500 fell 2.5%, and the Nasdaq fell 4.9%, with tech stocks among the hardest hit by the rate hike. Despite this, over the month of February, the three indices had progressed respectively by 3.2%, 2.6% and 0.9%, after a respective decline of 2%, 1.1% and 1.7% in January. .
The bitcoin regained about 11% over 24 hours on Monday evening, around $ 48,560 after having experienced a difficult week following a peak at $ 54,600 on February 22.
Nearly 50 million Americans have received at least one dose of the vaccine
Among the values in view, Johnson & Johnson gained 0.5% after receiving the green light from the American health authorities on Saturday to urgently market its vaccine against Covid-19, which has the advantage of requiring only one injection, with a rate of efficiency estimated at 72%. According to the boss of J&J, the vaccine from the American laboratory can begin to be injected within 48 hours. “We are in the process of delivering 4 million doses right now,” Alex Gorsky, the group’s general manager, told ‘NBC News’. “We are committed to delivering 100 million doses by June and up to a billion doses by the end of 2021,” he continued.
The arrival of this third vaccine in the United States, after those of Pfizer (+0,6%)/BioNTech (+ 1.08%) and Modern (+ 1.6%), helped to support the hope of a solid economic recovery in 2021, thanks to the acceleration of the vaccination campaign. In the United States, 49.8 million people (about 15% of the population) have received at least one dose, of which about half have already received two doses.
The Biden plan on its way to the Senate
The financial markets have welcomed the vote, on the night of Friday to Saturday, by the American House of Representatives, of the stimulus plan of 1.900 billion dollars presented by Joe Biden. This “American Rescue Plan” should notably finance the vaccination campaign and the purchase of medical supplies. It also offers new support measures for households, small businesses and local authorities, including a check for $ 1,400 in direct aid to most Americans.
The text must now be adopted by the Senate, where the Democrats show a narrow majority of 51 to 50, thanks to the vote of Vice President Kamala Harris. The US president thanked the Speaker of the House, Nancy Pelosi, and asked the Senate to pass the bill quickly, when there is “no time to waste”, he said. The objective is to promulgate the law before March 14, the date on which part of the aid provided for by the previous plans expires.
Manufacturing activity in shape in the United States and Europe
On the macroeconomic front, in the United States, the final manufacturing PMI index stood at 58.6 in February, against a flash reading of 58.5 and a consensus of 58.5. The ISM manufacturing index climbed to 60.8 in February, against consensus 58.9 and 58.7 a month earlier, signaling an acceleration in the expansion of US domestic manufacturing activity.
In addition, construction spending for the month of January grew by 1.7% compared to the previous month, against + 0.8% consensus and + 1% a month before. The major indicator for this week will be the release of employment figures in February on Friday. Economists anticipate the creation of around 180,000 jobs, after +49,000 in January (a disappointment) and the destruction of 140,000 jobs in December (a big disappointment …) The Covid crisis has destroyed around 21 million jobs in the States United in March-April 2020, of which just over 12 million have since been recreated.
In the euro zone, the final manufacturing PMI index stood at 57.9 in February against 54.8 in January (Flash estimate: 57.7). The index thus highlights an expansion of the sector for an eighth consecutive month and the strongest improvement in the economy for three years.
On the other hand, activity was a bit disappointing in China, where the Caixin-Markit manufacturing PMI index fell to 50.9 in February against 51.5 in January.
The 10-year T-Bond breaks around 1.4%
In the bond markets, calm returned on Monday, as inflation fears related to the recovery and stimulus plans faded a bit. Auditioned by the US Congress, Fed Chairman Jerome Powell twice repeated last week that the central bank had no intention of tightening monetary policy for a long time, believing that the US economy was far from to have overcome the health crisis. He showed little concern about a sustained surge in inflation, suggesting that prices could temporarily move above the Fed’s 2% target without triggering a hike in key rates.
The performance of T-Bond at 10 years, which had soared last Thursday to 1.54% in session (against 0.9% at the end of 2020), before falling to 1.43% on Friday evening, stabilized on Monday at 1.44%. The performance of T-Bond at 30 was at 2.22%, still up 5 basis points, against 1.66% at the end of 2020. In February, US sovereign rates at 10 and 30 years experienced their strongest upward surge since 2016.
On the foreign exchange market, the dollar index (which reflects its evolution against a basket of 6 benchmark currencies) gained 0.17% on Monday to 91.04 points, while the euro lost 0.24% to $ 1.2045 against the greenback.
Suspense ahead of the Opec + meeting on Thursday
Oil ended up in the red after a positive start to the session ahead of the OPEC + meeting scheduled for later this week. Oil prices have jumped about 25% since the start of the year, in the hope of a vigorous economic recovery by the end of 2021 thanks to vaccination campaigns against the coronavirus.
Monday night the April futures contract on a barrel of crude oil WTI fell 1.4% to $ 60.64 on the Nymex, while the Brent April maturity fell 1.1% to $ 63.69. At $ 63.81 and $ 67.70 per barrel respectively, the two benchmark contracts last Thursday touched levels more seen since January 8, 2020, before falling back on Friday.
The twenty-three members of Opec + will meet on Thursday to decide on their level of production from April. Rising crude prices and hopes of a recovery in global demand could encourage them to increase their production. Saudi Arabia could thus stop unilaterally reducing its production by 1 million barrels per day, as it did in February and March. In addition, the rest of the group could claim a hike of at least 500,000 bj. Some experts are therefore considering a fairly significant extension, from 1.5 to 2 million barrels per day in total from April, which could lead to a relapse in crude prices.
VALUES TO FOLLOW
Johnson & Johnson (+ 0.5%). The first deliveries of the American laboratory’s vaccine against the new coronavirus should begin shortly, with doses available as of tomorrow Tuesday. An advisory committee of the U.S. Centers for Disease Control and Prevention has unanimously recommended that this vaccine be used for people 18 years of age and older. It is therefore the third anti-covid vaccine authorized in the USA, after those of Pfizer / BioNTech and Moderna. In addition, J & J’s vaccine is the first to require only one dose. It would also be easier to deliver or keep. J&J intends to deliver more than 20 million doses by the end of March.
Modern (+1,6%). AstraZeneca (-0.6%) sold its entire 7.7% stake in the American laboratory Moderna during fiscal year 2020, according to the annual report of the Anglo-Swedish group. The Times, for its part, estimated that the sale had brought in more than $ 1 billion to AstraZeneca.
Twilio (+ 5.8%) soared with speculation on Wall Street, as the WSJ says the online IT services specialist is studying a $ 750 million investment in the telecom firm Syniverse.
Netflix (+ 2.2%), leader in streaming video which now faces stiff competition, nevertheless emerged as one of the big winners of the Golden Globes ceremony with four awards on Sunday in the cinema category and six for television productions.
Plug Power jumped 8.4% to $ 52.46, after a positive recommendation from JP Morgan, which analyst Paul Coster has judged is “attractively priced” and offers many opportunities for long-term growth. Remember that Plug Power is an American company specializing in the development of hydrogen fuel cells for electric vehicles. The company recently concluded a partnership with Renault. JP Morgan went from “neutral” to “overweight” (buy) on Plug Power on Monday with a target of $ 65, offering a potential of around 25% on the current price.
Berkshire Hathaway (+ 3.6%), the investment firm of legendary oracle of Omaha, Warren Buffett, this weekend posted quarterly net profit of $ 35.8 billion and annual profit of more than 42.5 billion, thanks to the capital gains generated by its portfolio. Operating profit, more representative of the activity, nevertheless fell 9% to $ 21.9 billion for the year ended. Berkshire also spent a record $ 24.7 billion on repurchases of its own shares in 2020.
Boeing (+ 5.8%). China’s Civil Aviation Authority has indicated that its main safety concerns regarding the 737 MAX need to be properly assessed. China says it is cooperating with the American for the return to service of the model. For its part, the Saudi public airline group Saudi Arabian Airlines plans, according to the Maaal news site cited by Reuters, to order 70 aircraft from Airbus and Boeing.
Zoom Video Communications (+ 9.6%) and Novavax (+ 3.9%) are among the financial publications expected after the close.
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