A gauge of global stock markets hit another all-time high on Monday as optimism grew that U.S. lawmakers will soon pass a COVID-19 aid package, and bitcoin surged to a record high after Tesla revealed it had purchased US$1.5 billion of the cryptocurrency and would soon accept it as a form of payment.
Tesla Inc shares were up 1.5 per cent, while cryptocurrency miner Riot Blockchain jumped 30 per cent and Marathon Patent Group climbed 33 per cent.
Tesla Inc’s move is seen as key for bitcoin, the world’s most widely-held crytocurrency, since Tesla is the fifth most-valuable U.S. company, and its CEO, Elon Musk, is among the world’s richest people.
“Musk getting involved in Bitcoin, to those investing in Bitcoin will be used as a way to tell others that this is a real asset, you can actually do something with it, they will support it as an argument of being the way of the future,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
Investors sold U.S. Treasuries on expectations the U.S. fiscal stimulus would boost inflation more quickly than expected, which pushed benchmark yields to 11-month highs.
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Bitcoin soars to new record after Tesla’s US$1.5B investment
Major U.S. stock indexes hit record highs in early New York trading, extending a recent streak of gains.
Feeding the optimism were comments on Sunday by U.S. Treasury Secretary Janet Yellen, who said that if Congress approves the US$1.9 trillion plan, the country would get back to full employment next year.
Congress on Friday approved a budget plan that would allow a coronavirus relief bill to muscle through in the coming weeks without Republican support.
“We now have a situation where the Democrats do not need Republican approval in order to move ahead with the full US$1.9 trillion stimulus package,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
The Dow Jones Industrial Average rose 135.76 points, or 0.44 per cent, to 31,284, the S&P 500 gained 13.6 points, or 0.35 per cent, to 3,900.43 and the Nasdaq Composite added 72.41 points, or 0.52 per cent, to 13,928.71.
The pan-European STOXX 600 index rose 0.30 per cent, while MSCI’s gauge of stocks across the globe gained 0.52 per cent. The MSCI index hit its ninth record high of 2021 overnight.
Oil prices rose to their highest in just over a year. Brent oil was up 68 cents, or 1.2 per cent, at US$60.02, while U.S. West Texas Intermediate rose 68 cents, or 1.2 per cent, to US$57.53.
The dollar was flat to slightly lower in choppy trading, holding its ground against a basket of major currencies as investors continued to price in a faster U.S. recovery than in most countries.
The dollar index fell 0.025 per cent, with the euro up 0.02 per cent to US$1.2045.
Benchmark 10-year yields hit 1.200 per cent, the highest since March, before falling back. Benchmark 10-year Treasury notes last rose 4/32 in price to yield 1.1584 per cent, from 1.17 per cent late on Friday.
Spot gold added 1.1 per cent to US$1,831.75 an ounce.
(Additional reporting by Devik Jain, Shreyashi Sanyal and Medha Singh in Bengaluru; Marc Jones in London; and Swati Pandey in Sydney; Editing by Larry King, Dan Grebler and David Gregorio)