NEW YORK – Wall Street stocks powered to fresh records yesterday, while bitcoin touched an all-time high after Tesla declared itself an investor in the cryptocurrency.
Also rising were oil prices to a 52-week high, while United States Treasury yields surged before pulling back.
All three major US stock indices streaked to fresh records, extending last week’s rally on optimism that additional US fiscal stimulus is coming soon, along with an expected economic recovery.
Investors are betting that President Joe Biden will succeed in winning approval for most aspects of his US$1.9 trillion (RM7.7 trillion) fiscal relief package, analysts said.
Over the weekend, Treasury Secretary Janet Yellen predicted that the US will get back to full employment next year if the package is enacted, but warned that job gains will lag if Congress does not come through.
Yields on 10- and 30-year Treasury bonds initially jumped in the aftermath of Yellen’s comments, but later ebbed.
Rising yields have sparked increased discussion about higher inflation risks, but the anxiety is still contained at this point, analysts said.
“Rising interest rates are indicative of an improving economy,” said Briefing.com analyst Patrick O’Hare, adding that there is little evidence of general inflation in the economy.
“The stock market is not overly concerned with the inflation factor.
“It will be one day. It just isn’t now.”
Tesla magic lifts bitcoin
Earlier, bitcoin hit a record high of near US$45,000 after Elon Musk’s Tesla invested US$1.5 billion in the digital currency and said the electric carmaker will soon accept it as payment.
The announcement comes on the heels of a cheeky social media embrace of bitcoin by the iconoclastic Tesla chief executive, and marks the latest step in the mainstreaming of the cryptocurrency.
“This is probably one of the biggest developments for the cryptocurrency industry,” said Fawad Razaqzada, an analyst at ThinkMarkets.
“Tesla is going to be a major player in the auto industry, and if it starts accepting bitcoin as a form of payment, it will give the digital currency further legitimacy.”
Shortly after news broke of the investment, bitcoin hit US$44,795.20 before pulling back slightly.
Near 2200 GMT, the currency was at US$44,350, up 17% for the day.
Meanwhile, benchmark oil contract Brent North Sea rose above US$60 per barrel to hit its highest level since the coronavirus pandemic began a year ago.
Brent’s climb above US$60 is due to the Organisation of the Petroleum Exporting Countries oil cartel and its allies cutting output after the pandemic slashed demand, said analysts.
Petroleum-linked shares were especially strong yesterday in the US, thanks to the recent bounce in oil prices. Chevron jumped 2.5%, Apache 10% and Halliburton 5.6%.
Key figures around 2150 GMT
New York – Dow: UP 0.8% at 31,385.76 (close)
New York – S&P 500: UP 0.7% at 3,915.59 (close)
New York – Nasdaq: UP 1.0% at 13,987.64 (close)
London – FTSE 100: UP 0.5% at 6,523.53 (close)
Frankfurt – DAX 30: UP less than 0.1% at 14,059.91 (close)
Paris – CAC 40: UP 0.5% at 5,686.03 (close)
EURO STOXX 50: UP 0.3% at 3,665.51 (close)
Tokyo – Nikkei 225: UP 2.1% at 29,388.50 (close)
Hong Kong – Hang Seng: UP 0.1% at 29,319.47 (close)
Shanghai – Composite: UP 1.0% at 3,532.45 (close)
Brent North Sea crude: UP 2.1% at US$60.56 per barrel
West Texas Intermediate: UP 2.0% at US$57.97 per barrel
Euro/dollar: UP at US$1.2049 from US$1.2046 at 2200 GMT last Friday
Dollar/yen: DOWN at ¥105.22 from ¥105.39
Pound/dollar: UP at US$1.3741 from US$1.3735
Euro/pound: DOWN at 87.67 pence from 87.71 pence. – AFP, February 9, 2021
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