European stocks and U.S. bond yields climb on expectations stimulus will heat economy

European stocks and U.S. bond yields climb on expectations stimulus will heat economy

European stocks, U.S. stock futures and U.S. bond yields rose on Monday on expectations additional stimulus will heat up the U.S. economy, which is the world’s largest.

After advancing 3.5% last week, the Stoxx Europe 600 SXXP, +0.30% rose 0.4%.

U.S. stock futures ES00, -0.01% rose after a 4.7% advance for the S&P 500 SPX, +0.74% last week. The yield on the U.S. 10-year Treasury TMUBMUSD10Y, 1.167% rose as high as 1.20%, and Brent crude-oil futures BRN00, 0.17% topped $60 for the first time in a year.

The backdrop to the gains was the renewed talk in Washington, with House Democrats set to introduce a new $3,000-per-child tax credit, after the Senate last week approved a budget package for the stimulus plan. Leading economists have been debating whether President Joe Biden’s coronavirus vaccine relief would provide so much fuel as to overheat the U.S. economy, a claim former Treasury Sec. Larry Summers has been making.

U.S. Treasury Secretary Janet Yellen said while inflation is a risk, not doing enough was a greater threat to the economy.

The rollout of vaccines also is providing optimism, with economists at Citi saying developed markets will reach herd immunity between the late third quarter to the fourth quarter of 2021, which will help offset the economic impact of the severe pandemic this winter.

Of stocks on the move, Dialog Semiconductor DLG, +16.04%, which supplies microchips to Apple AAPL, +0.11%, rose 16% to €65 after agreeing to be bought by Japan’s Renesas Electronics 6723, -3.61% for €4.9 billion, or €67.50 per share.

Experian EXPN, -0.64% fell, after saying it is conducting an investigation into leaked credit data in Brazil. It says so far there is no evidence it came from its Serasa division.

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