Global Stocks Gain, Oil Climbs Amid U.S. Cold Snap: Markets Wrap

(Bloomberg) -- Global stocks and U.S. equity futures rallied as investors took comfort in progress on the Covid-19 vaccine rollout, while freezing temperatures in Texas and across the American South roiled energy markets. The dollar weakened, and U.S. and Canadian stock markets were closed for national holidays.

The FTSE 100 Index finished up 2.5% and the pound strengthened after the U.K. recorded 15 million vaccinations against coronavirus. Japan’s Nikkei 225 Stock Average topped 30,000 yen for the first time since August 1990 on data showing the economy is charging ahead.

Meanwhile, an Arctic blast in the U.S. threatened to disrupt energy supplies, sending crude oil to a 13-month high. Texas began rolling power blackouts for millions of households for the first time in a decade and traders estimate a few hundred thousand barrels a day of output in the state may be impacted by well shutdowns, traffic jams and power outages. West Texas Intermediate futures rose 1.5%.

Several major markets didn’t trading on Monday. The U.S. is shut for the Presidents Day and exchanges in China and Hong Kong were closed for the Lunar New Year holiday.

Still, the reflation trade remains alive and well. Global equities are on course to rise for 11 straight sessions -- the longest stretch since 2009 -- and the Treasury yield curve has tested the steepest levels in more than five years. Investors are banking on U.S. government spending and vaccines to drive the economy out of the pandemic.

“The reflation trade is set to continue to gather steam with vaccine deployment and massive fiscal spending by the Biden administration,” said Esty Dwek, head of global market strategy for Natixis Investment Managers Solutions. “Yields are likely to rise further and the catch-up of cyclical sectors should continue.”

Bitcoin traded around $48,000 after hitting an all-time high in weekend trading. The cryptocurrency is benefiting from a wider embrace across the financial services industry, and over the weekend Bloomberg reported that a Morgan Stanley investing arm is considering adding Bitcoin to its list of possible bets.

In Europe, Vivendi SE surged 20%, the biggest gainer in the Stoxx 600 Index, after the media group said it was considering spinning off its Universal Music Group by the end of the year.

Here are some key events coming up:

• Earnings roll on with companies including, BHP Group, Daimler, Credit Suisse, Deere, Danone and Nestle.
• Euro-area finance ministers will discuss the bloc’s current economic situation and outlook on Tuesday.
• Federal Open Market Committee minutes from the January meeting are due Wednesday.
• U.S. retail sales figures come on Wednesday.

These are the main moves in markets:

Stocks

• Futures on the S&P 500 Index increased 0.5%.
• The Stoxx Europe 600 Index climbed 2.5%.
• The MSCI Asia Pacific Index advanced 0.6%.
• The MSCI Emerging Market Index gained 0.6%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.1% to 1,122.41.
• The euro increased 0.1% to $1.2131.
• The British pound climbed 0.4% to $1.3905.
• The Japanese yen weakened 0.4% to 105.33 per dollar.

Bonds

• The yield on 10-year Treasuries was unchanged at 1.21%.
• The yield on two-year Treasuries was unchanged at 0.11%.
• Germany’s 10-year yield increased five basis points to -0.383%.
• Britain’s 10-year yield advanced five basis points to 0.571%.

Commodities

• West Texas Intermediate crude gained 1.1%.
• Gold weakened 0.3% to $1,818.86 an ounce.

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