U.S Treasury prices fell on Thursday after President-elect Joe Biden move forward with a $2 trillion stimulus bill. The yield on the 10-year Treasury note, which moves inversely to its price, rose 1.2 basis points to 1.1% even as stocks were buoyed by the stimulus hopes.
- Yields rose for Treasuries from the 3-year note to the 30-year bond, as investors bet stimulus would lead to more issuance of government debt and higher inflation.
- The S&P 500 was set to open slightly higher, with futures up 0.22%, while Dow Jones futures and NASDAQ gained 0.31% and 0.02%, respectively.
- Last week, investors turned to stocks that are more exposed to the economic cycle, such as financials and industrials, in the hope of more stimulus under Biden’s presidency.
- Markets are also betting more stimulus will help growth and inflation, which will push bond prices down and yields higher.
- Analysts bet any rise in U.S yields and the dollar should not be enough to derail further rallies in equity markets and support energy.
- Joe Biden is expected to lay out his plans later in the day in Wilmington, Delaware.
U.S stocks, dollar, and Treasury yield are gaining. SPY is up 0.30%, EURUSD is down 0.16%, U.S. 10 Year Treasury yield is up 1.43%
