By Steve Goldstein
Investors continued to flee bonds and snap up commodities on hopes the rollout of COVID-19 vaccines will reinvigorate the global economy, sending European stocks lower on Monday.
The yield on the benchmark 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +0.91% rose as high as 1.39%, after rising 14.5 basis points last week. The yield on the 10-year U.K. gilt /zigman2/quotes/211347177/realtime BX:TMBMKGB-10Y +1.71% and German bund /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y +1.51% also increased. Yields move in the opposite direction to prices.
U.K. Prime Minister Boris Johnson on Monday is set to unveil England’s reopening plan, which will start with schools and by the end of March extend to golf courses and tennis courts, according to published reports. The country’s job-furlough plan is set to be extended through the summer.
Globally, new coronavirus cases have dropped after peaking in January.
“One of the (many) hot stories in financial markets right now is the surge in base metal prices, where the likes of copper, tin, nickel, lead and zinc are all rallying on the back of global recovery hopes and supply challenges. This comes at a time when investors are coming around to the view that the Fed really does want to let inflation run hot and that bonds are certainly not an asset class to hold in the current environment. The key challenge for financial markets is whether the bond selloff can prove orderly enough to allow reflationary asset classes — including equities to prosper,” said strategists at ING.
After squeaking out a 0.2% rise last week, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +1.00% slumped 0.6%. U.S. stock futures /zigman2/quotes/210407078/delayed YM00 +0.31% /zigman2/quotes/209948968/delayed ES00 +0.36% /zigman2/quotes/210219788/delayed NQ00 +0.50% also were lower, with the Dow contract down 170 points.
Technology-sector plays such as microchip-equipment maker ASML Holding /zigman2/quotes/206208657/delayed NL:ASML +1.98% fell. Also lower were companies that have thrived during the pandemic, such as fast-food delivery company Delivery Hero /zigman2/quotes/208380525/delayed XE:DHER +1.22% , meal-kit preparer HelloFresh /zigman2/quotes/203376622/delayed XE:HFG +3.86% , and supermarket-delivery company Ocado /zigman2/quotes/207225647/delayed UK:OCDO +2.72% .
Travel companies rose on the reopening hopes, with airports operator Aéroports de Paris /zigman2/quotes/203616065/delayed FR:ADP +0.94% and travel agent TUI /zigman2/quotes/207049334/delayed UK:TUI -0.23% rising.