European equities rose Monday as U.S. futures in technology fell, with bond yields near a one-year high as the world’s largest economy was on the verge of raising $ 1.9 billion.
The U.S. Senate passed its $ 1.9 billion stimulus package over the weekend and sent it back to the U.S. House for approval before President Joe Biden could sign it into law. The increase in bond yields – with the ten-year treasury TMUBMUSD10Y,
with 64 basis points in 2021 to Friday – has led investors to switch from assets that are considered valuable valuations, such as companies in the technology sector, and in unfavorable sectors with less demanding valuations.
The Stoxx Europe 600 SXXP,
rose 0.6%, with companies struggling during the COVID-19 pandemic. Cruise Operator Carnival CCL,
oil service company TechnipFMC FTI,
tourism conglomerate TUI TUI,
and shopping center operator Klepierre LI,
at the top of the leadership board.
Preparation company HelloFresh HFG,
and hydrogen fuel company Nel NEL,
both have risen by more than 100% over the past 52 weeks, declining sharply.
Future on the technological Nasdaq-100 NQ00,
it fell 1.6%.
Florent Pochon, a strategist at French bank Natixis, said there were many reasons why markets would be turbulent, but he expected a stock rage to be curtailed as long as the Federal Reserve remained dove.
“As far as valuation is concerned, it seems that the US ten-year approach is approaching fair value, taking into account all the uncertainty that determines what it is,” he said. “As large as the US fiscal stimulus plan may be, it is not expected to generate increased structural inflation, but rather to deepen the country’s trade deficit.”
Shares in educational publisher Pearson PSON,
dropped to as much as 5% before then turning around and rising by 5%. The company’s results and prospects were largely in line with expectations, as it set out plans to sell its local courseware to local publishing companies and occupy less property.