Second Day of Gains Help to Pare Last Week’s Tumble…..

U.S. equities finished solidly higher for a second-straight session, as the markets continued to chip away at last week’s drop amid more muted volatility after a recent flare up that came courtesy of ramped-up activism among a group of retail traders. Optimism that COVID-19 vaccine rollouts may be gaining traction also buoyed sentiment, as well as comments out of Capitol Hill that suggest talks of further fiscal relief have been constructive, and manufacturing data that has painted a positive recovery picture. While the economic front was dormant today, earnings season continued to roll on with United Parcel Service, Pfizer and Exxon Mobil posting mixed results. Treasuries were lower, boosting to yields to foster some steepening of the yield curve, and the U.S. dollar added to a recent move higher, but the greenback’s downtrend established in 2020 remained intact. Crude oil prices gained ground, and gold fell. Europe finished higher to add to yesterday’s gains, while markets in Asia rallied.

The Dow Jones Industrial Average jumped 476 points (1.6%) to 30,688, the S&P 500 Index was up 52 points (1.4%) at 3,826, and the Nasdaq Composite increased 209 points (1.6%) to 13,613. In heavy volume, 1.1 billion shares were traded on the NYSE and 7.1 billion shares changed hands on the Nasdaq. WTI crude oil rose $1.21 to $54.76 per barrel. Elsewhere, the Bloomberg gold spot price fell $25.00 to $1,835.78 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—moved 0.1% higher to 91.12.

Treasury yield curve steepens amid vaccine and economic recovery optimism…..

Treasuries were lower with the economic calendar void of any major releases today. The rate on the 2-year note was up 2 basis points (bps) at 0.13%, while the yields on the 10-year note and the 30-year bond gained 3 bps to 1.11% and 1.87%, respectively.

The Treasury yield curve has steepened as longer-term rates have moved higher, while the U.S. dollar has gained some traction and is trading near the top end of a recent range established after 2020’s drop to multi-year lows.

The markets grappled with the increased volatility in the equity markets that has intensified from some heightened activism among a cohort of retail traders, along with increased signs of progress on the COVID-19 vaccine rollouts that has helped buoy the outlook for a more rapid global economic recovery.

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