Value stocks beat growth stocks
- Value stocks beat growth last week, with the DJ30 eking out a 0.1% gain while the tech-heavy NASDAQ100 fell back by 1.6%. Names including Apple (-4.1%), Netflix (-2.9%), and Tesla (-4.3%) were all in the red.
- One of the firms that helped the DJ30 to a positive week was construction equipment maker Caterpillar, which gained 6%, taking its rally over the past three months beyond the 20% mark.
Financials climb on Treasury Bond yield
- On the back of increases in long-term interest rates, bank stocks enjoyed a rally last week.
- In February, the yield on the 10-year US treasury has progressed from around 1.1% to 1.34%, its highest level since late February 2020. In response, the S&P 500’s banks sub-sector added 5.5% last week, taking its rally over the past three months to 29%.
- Higher long-term rates open up room for banks to earn higher margins on loans, helping profitability.
- Over the past year, bank stocks have now broken even.
- That picture was reflected in the UK, where names including Barclays and NatWest posted 5% plus gains last week.
Bitcoin races past $50,000
- Bitcoin broke $50,000 last week, to reach a new all-time high, and continued to climb, reaching as high as $58,000 over the weekend.
- While some analysts say it may push to $60,000 over the coming weeks, certain technical indicators, such as RSI and Stochastics, are in overbought zones on numerous chart timeframes, which is generally an indication that we could soon see a retracement.
- Last week, Morgan Stanley listed as an authorised participant in a newly filed Bitcoin ETF, which could be the first Bitcoin ETF approved by the SEC.
Oil remains around $60
- US inventory data on Wednesday showed that stockpiles were at their lowest since March as exports and refinery usage were at their highest in a year.
- The cold snap in America halted production in Texas and caused lower supply, supporting prices.
- However, Saudi Arabia last week signalled its intention to raise output amid rising prices. The Saudis will outline plans for this next month.
Year of the Ox opens bullish
- Chinese stocks rallied at the opening on Thursday, the first trading day in the new Chinese year of the Ox.
- According to Global Times, China’s online sales exceeded 122 billion Yuan over the holiday, with online catering sales surging 135% compared with last year’s Spring Festival, as more Chinese ordered ready-to-eat meals through e-commerce or online food delivery platforms.
The Week Ahead
- Fed Chair Powell to testify on the Semiannual Monetary Policy Report before the Senate Banking and the House Financial Services Committees (Tuesday and Wednesday, respectively).
Written by a team of experienced financial analysts at eToro.
This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results.