World stocks inch up on increasing bets on faster economic recovery

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Global stock prices inched higher while U.S. bond yields hovered near a 13-month peak on Monday as investors bet U.S. economic growth will accelerate after the $1.9 trillion stimulus bill President Joe Biden signed into law last week.

FILE PHOTO: A man walks past a stock quotation board at a brokerage in Tokyo, Japan February 26, 2021. REUTERS/Kim Kyung-Hoon/File Photo

U.S. S&P500 futures rose 0.2% in early Asian trade, trading just below a record high level touched last week, while Japan’s Nikkei ticked up 0.3%. “Most market participants and policy-makers have been surprised by the speed of the recovery. On our estimates, the U.S. economy will reach pre-COVID-19 output levels by the current quarter,” said Chetan Ahya, global head of economics at Morgan Stanley in New York, in a note.

Some investors speculate part of $1,400 direct payments to households could find its way to stock markets, as seemed to be the case with similar direct payments made last year for coronavirus relief. “Following the fiscal stimulus packages it is inevitable that Fed GDP forecasts will be revised up, and some FOMC members might think rates will have to move higher sooner than they anticipated last December,” wrote economists at ANZ.

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