Daily Market Color

Equities Rebound on Growth Expectations

S&P has best day since June
News of J&J vaccine’s approval and the House passing a new $1.9 trillion stimulus bill helped investors shake off last week’s volatility to drive equities higher, with the S&P having its best day since June increasing 2.38%. The S&P is now up approximately 75% from its March 2020 lows.  Yields ended the day mixed with investors buying the belly of the curve, while the long-end continued its sell-off.  The 10yr finished the day up 1bps to 1.42%.
U.S. manufacturing expands for the 9th straight month
U.S. manufacturing expanded at its fastest rate in three years, while material costs accelerated most since 2008. The ISM manufacturing index increased to 60.8, up from 58.7, which exceeded economists’ expectations of 58.9. A reading above 50 indicates expansion. The ISM’s measure for prices paid for inputs did increase 4pts to 86, the highest level since July 2008.
Richmond Fed President Barkin downplays volatility
Barkin downplayed the recent volatility seen in the Treasury market, with his primary concern focusing on the labor market. He does not view the increasing yields on Treasuries as a persistent sign of inflation, but rather a result of the positive vaccine, economic, and fiscal stimulus news.
U.S. vaccinations regain momentum
Vaccination efforts picked up steam this past weekend after severe winter storms slowed the progress of distribution down to 1.3 million daily doses. The seven-day average is up to 1.6 million doses thanks to 2.2 million doses delivered on Friday and 2.4 million doses on Saturday and Sunday.

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