Summary List Placement
- Global recovery sentiment helped lift US and European stocks higher on Wednesday.
- The International Monetary Fund lifted its global GDP estimate for 2021 to 6% from 5.5%.
- President Biden has said all US adults should be eligible for COVID-19 vaccinations by April 19.
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US and European stocks edged higher on Wednesday as investors continue to bet on a global recovery after a string of strong economic data in recent weeks.
Economists at the International Monetary Fund lifted their global growth forecast for 2021 to 6% from 5.5% on Tuesday, pointing to improved vaccination rates and the latest stimulus packages.
“Global stocks are treading water around all-time highs Wednesday as investors weighed the pandemic and stimulus support for the economic rebound,” said Stephen Innes, chief global market strategist at Axi.
US indices could edge even higher given President Biden’s promise that coronavirus vaccines would be available to everyone in the country by April 19, about two weeks ahead of schedule, said Connor Campbell, a financial analyst at SpreadEx.
Yield on the 10-year Treasury fell 4.4 basis points to 1.65%, the lowest closing level in almost two weeks. This is possibly linked to lower inflation expectations, according to Deutsche Bank analysts.
But despite the third wave in Europe, concerns that AstraZeneca’s vaccine leads to blood clots, and worries about an upcoming slowdown in the UK’s vaccination programme, the IMF growth upgrades helped keep the markets feeling fresh, Campbell said.
“We continue to see broad upside for markets,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “The biggest gains are likely to be in cyclically exposed portions of the market, like financials and energy. We also see gains for select reopening winners across regions, as well as for select commodities.”
Asian markets pulled back from three-week highs as geopolitical tensions added to investor jitters. The US and its allies are said to be considering a joint boycott of the 2022 Beijing Winter Olympics over China’s human rights abuses.