Shares, Oil and Bond Yields All Climb as Financial Information Improves

Stock, commodity and bond yields rose Tuesday on signs of a stronger global economic recovery. There is also evidence in the data that manufacturers are struggling to keep up with demand, which could add to inflationary pressures.

The S&P 500 climbed 0.4 percent in early trading, nearing a record. The yield on 10-year government bonds rose to 1.62 percent, the highest level in more than a week.

Most European stock indices were higher. The Stoxx Europe 600 index climbed 1.2 percent and expanded its course into a record range. All sectors were higher, with energy and mining stocks being the biggest gains.

Manufacturing activity readings in both the United States and the euro zone rose to record highs in May, according to IHS Markit.

The surge in manufacturing output is another sign that the euro area economy is recovering strongly in the second quarter, said Chris Williamson, an economist at IHS Markit.

“However, there were also record-breaking delivery delays in May, which are holding back production growth and preventing companies from meeting demand to an unprecedented level,” he added.

In Europe, the annual inflation rate in the euro area rose to 2 percent in May, according to the first estimate by the statistics authority of the European Union, thus reaching the European Central Bank’s target for the first time since November 2018

Optimism was bolstered by rosier forecasts for economic growth released Monday by the Organization for Economic Co-operation and Development. The group forecast the global economy would grow 5.8 percent in 2021, up from a forecast of 4.2 percent in December. The spread of vaccines and strong fiscal incentives in the United States were said to help improve the economy, but there were concerns about variants of the virus.

In China, the manufacturing sector reported the sharpest increase in new employment in five months in May, but delivery delays and higher procurement costs are also reported.

Oil prices rose when the Organization of Petroleum Exporting Countries and its allied producers, including Russia, met. Analysts assume that oil producers will continue to gradually increase production quotas. West Texas Intermediate, the US crude oil benchmark, rose 3.5 percent to over $ 68 a barrel.

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